The federal goverment said in a statement that it had decided to open the door for new Australian apartment buyers because of fears that house prices would fall.
Mr Morrison, Australia's finance minister, said the goverment might restructure its overseas investment framework before allowing overseas buyers to take over apartments that were not sold on time for other reasons.
It is understood that Australia's goverment had previously stipulated that the timely sale of prospective housing will be regarded as second-hand housing will not be allowed to resell to overseas buyers. At the same time, overseas buyers can only buy new homes.
The new measures open the door to potential buyers in a timely manner, giving them more room to choose from in the future market. It will also effectively avoid falling prices in the housing market caused by too many new apartments that fail to close on time.
Morrison said in a report that the plan would address concerns in the Australian housing market, meaning that developers would not be in trouble even if buyers could not transfer their homes successfully. This is a common sense that a newly built apartment or stand-alone house, or a residential house under construction, or a house that has never been transferred, should not be considered as a second-hand house.
Australian property developer Mirvac had previously said it was ready for a rise in demand defaults this year and was expected to exceed the historical average of more than 1 percent.
According to the Australian Financial Review, the bill will take effect today and the corresponding laws and regulations will be introduced as soon as possible, allowing developers to recover properties that overseas buyers have failed to close on time under the "New House exemption Certificate."
1
Auction volume this week
The number of auctions this week will be one of the biggest annual auctions. Real estate agents said the number of homes sold on the market this week rose, in contrast to previous months, after about 20 percent fewer home auctions in Sydney and about 4 percent less in Melbourne than in the previous year.
According to current CoreLogic statistics, there were about 3127 home auctions in the five capital cities this week. If the auction goes well this week, it could be the largest number of auctions of the year. Although the overall number of auctions has increased, Sydney and Melbourne's home sales are still slightly lower than last year.
Melbourne had about 1508 auctions this week, up from 1143 in Sydney, according to Corelogic. For sellers, there is not much time left for the year, so they hope to sell their property in this limited time. From the buyer's point of view, they see countless new opportunities in the market, with a wider range of options, hopefully a perfect storm.
2
Strong return of Chinese buyers
Australian real estate has entered the "spring sales" peak season, with Chinese buyers taking advantage of the hot return. Financing and real estate agents say Asian investors have found new ways to re-enter the Australian property market. This includes buying low-priced real estate as a target and trading in cash. After Australian bankers closed their financing pipeline for overseas buyers this year, others turned to wealthy or foreign banks for loans.
The buying boom has revived and has ignited concerns about a housing bubble in Australia, alerting regulators. Australian property prices are among the most expensive in the world. The Sydney Harbour Bridge-view apartment now costs more than similar Paris Eiffel Tower or Miami Beach View, according to research by real estate group Knight Frank.
"We are even seeing people from medium-sized Chinese cities such as Chengdu or Shenzhen coming to Australia to buy houses," David Chatterjee, head of Melbourne Lucror Property, told Reuters. "We find that most home and land buyers are trading in cash."
The Bank of Australia has expressed concern that interest rates are at record lows and that the housing boom may be an important risk to financial stability. Australian bankers tightened financing for foreigners earlier this year, alleging that increased credit risk had nearly dried up overseas demand. But inquiries from Chinese buyers picked up, according to Juwai.com, the country's largest international real estate website, with queries for $1 million in real estate up 34 percent in the September quarter, up from 12 percent in June.
3
Loan Market: a strong complement for Foreign Banks
Foreign banks, including (UOB) and HSBC (HSBC), have stepped in to fill the gap left by big banks, according to regulatory documents.
HSBC a speaker said the majority of bank mortgage customers or local Australians. United China Bank did not respond to a request for comment.
Non-bank lenders also took a fancy to the market, and (Basis Point), a consultancy, said it had received numerous advice from non-bank lenders as well as borrowers.
"Real estate developers are calling us to find out who to borrow and investors are paying attention to market intelligence in order to make loans," said CT Johnson, general manager of the base point.
Some wealthy retail investors are pooling money to invest in Australian property. Challis Capital, a Sydney-based corporate advisory firm, also stepped into real estate investment this month after it was appointed by an Asian private investor group of A $100 million (US $74 million).
Pepper Group, a non-bank lender, issued A $700m in mortgage-backed securities this year, making it the largest financing deal in Australia in a decade.
In Shanghai, an executive at a private wealth management consultancy told Reuters that he had recently been approached by three investment managers to invest in funds that offered Chinese loans to buy Australian property. The executive could not be named because of client secrecy.
In an environment of ultra-low returns, returns on such investments can be as high as 15 percent, according to several investors.
Long Yi Hao, head of Longshi Group, a Chinese-owned company, said currency depreciation also drove Chinese investors overseas. Longshi has three developments in Sydney. But now that Australian banks are more demanding to lend, Chinese buyers will seek loans from domestic branches of Chinese banks and Chinese private institutions at much higher rates.
