Saturday, May 31, 2014

Not homes, simply a commodity to be traded

It's yet another record property weekend, with 900 houses being auctioned in Sydney.

And there we see the problem.

The problem isn't what too many people are claiming - cashed-up Chinese pushing up the prices to the point that poor Aussies are being priced out of their own housing.

Every weekend we see hundreds of houses being auctioned, demonstrating the real problem behind our housing costs. We've developed the culture that it's just a commodity to be bought and sold to make a profit.

The reserve Bank put out some information last week, reported in Sydney Morning Herald. 

Amid anecdotal claims some local buyers are being priced out of the market by cashed-up overseas investors, a new submission from the central bank examines official data on the topic.

It says foreign investment in residential housing was at most 5 to 10 per cent of market turnover, and last year the government approved $17 billion in property investment from overseas, with most of the money funding the purchase and construction of new homes.

As foreign investors' share of the market has remained fairly steady over the past two decades, the Reserve concluded overseas buyers were not the main reason for price rises over the period.

It's not foreigners to blame, it's us.

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