It’s time that foreign investment, and its impact on housing affordability, was taken more seriously, according to one real estate CEO.
Driscoll, CEO of Starr Partners real estate group, says that the full impact of foreign investment hasn’t even been seen yet, but will be soon.
Mr Driscoll says it’s about time that the possibility of foreign investment wreaking havoc on the Australian economy was considered a legitimate concern, and action is taken.
“Foreign investment is not the elephant in the room, it is a herd of elephants in the room and more needs to be done. We need to start addressing the prevalence of empty homes and recognise its impact on the mounting affordability crisis,” said Mr Driscoll.
Mr Driscoll believes that foreign investors are acquiring property in desirable locations, which are then being left uninhabited. In his estimates, the number of unoccupied dwellings in Sydney number more than 200,000.
“We know that the current affordability crisis is a matter of simple economics – demand heavily outweighs supply. Foreign investors are only exacerbating the problem by buying properties and leaving them vacant,” said Mr Driscoll.
“In 2011, there were almost 120,000 unoccupied dwellings in Sydney alone. In the six years that have followed, foreign investment in property has risen exponentially and completely transformed the market,” he said.
Mr Driscoll believes that the boom in foreign investment is a contributor to this figure almost doubling.
“From my own rudimentary research, I truly believe that the recent advent of foreign investment has contributed to this figure almost doubling. Foreign investment in our property sector only gained genuine momentum in 2012 and in just a few short years we are already seeing 10-20 per cent of property being sold in some pockets to offshore buyers, which leaves a lot of Australians on the sidelines,” said Mr Driscoll.
“In the first instance, at the very least, these properties should be offered for rent, but if they were to hit the open sales market, it would certainly help alleviate the sparsity issue we are currently facing,” he said.