Foreign investment in real estate has long been a politically and financially contentious issue in Australia, with bipartisan support for foreign investment from both sides of the political aisle to allow overseas investment in real estate.
However, erroneous misconceptions remain as to the actual impact that foreign, and in particular Chinese investment has in Australia.
Despite substantive evidence to the contrary, such as the findings of an Australian Treasury report late last year, a definitive intercultural relations breakdown persists among the populace, with many keen to point the finger at Chinese and other foreign nationals for the price growth in the major Sydney and Melbourne housing markets.
While at the same time, Chinese nationals are being targeted by Australian policymakers in order to increase Australia's housing stock, with the same Treasury report clearly stressing "foreign investment is being channelled into increasing the property supply as intended," with "Chinese" demand singled out as being critical.
With the positives of foreign investment on clear display, it is of paramount importance that the public is better educated as to not only the benefits of wide scale foreign investment into the real estate sector, but also the the other factors in play that are causing Australia's current housing supply and affordability crisis.
David Rodgers, senior lecturer in Architecture, Design and Planning at the University of Sydney, told Xinhua that the impact of Chinese investment on real estate is "minimal," and too much emphasis is being placed on looking for "easy answers to complex problems" in the real estate market.
"I think an easy answer people have come up with about the housing affordability problem is to say, well, it's all the Chinese capital," Rodgers said.
"The housing affordability problem is a very complex problem, and the ways that you might address it can be quite confronting to people."
Recent reports in The Australian newspaper on Jan. 30 suggested that billions of dollars in "dodgy" Chinese investment money was making its way to Australian shores, and said the government agency Austrac investigated 1 billion Australian dollars of "suspicious" transactions involving real estate investment from China.
The story drove a narrative ensconced in a perceived threat to Australian housing affordability from China, yet admitted in the third to last paragraph "These so-called 'suspicious matter reports' are not definitive evidence of wrongdoing, but -rather indications wrongdoing may have occurred."
Stories such as these add fuel to the fears regarding foreign investment that are held by the public yet comprise such a small amount of the value of total real estate, in either new dwellings which foreign investors can actually buy or established dwellings which they are barred from investing in regardless.
Foreign direct investment into Australia is never going to be infallible. There will always be instances whereby regulatory guidelines are not correctly followed, or instances where the Foreign Investment Review Board (FIRB) is required to step in and make a determination that for whatever legislative reason, approval should be denied.
Gavin Norris, head of Australia for Juwai.com, one of the largest real estate websites in China, told Xinhua that over 2, 000 investigations have been done in relation to real estate investments, with 61 forced sales, equating to roughly a three percent wrongdoing rate.
"That, in light of the small figure, when you look at it as the total investment of foreign capital into Australia's real estate, it's an even smaller sum," Norris said.
"Of all those forced sales which accounted for roughly 140 million dollars, when you look at it in the terms of the 343 billion dollars in foreign purchases in 2010, its four hundredths of one percent."