australian identity: A Must Read

http://www.natalt.org/2014/02/11/chinese-investors-in-australian-real-estate/

Foreign investment in Real Estate: The situation as it is today.
Chinese investors in Australian real estate have been causing problems for first home buyers, helping to drive up prices even further. The Australian government is continuing its program of treason against the Australian nation, by continuing to allow foreign investment in residential property in Australia, and failing to ensure that regulations regarding foreign investment are enforced. The Real Estate lobby, and government at all levels are playing us for chumps, selling out our future for the benefit of a few cowboy investors and handing Australia on a platter to foreign interests.
We have written in the past about the inter-generation conflict in Australia, Baby Boomer’s pricing their own children out of the market and foolishly chalking this up as some form of success. Local investors and little landlords on a feeding frenzy, building their property portfolio and outbidding working Australians who want a home to live and and maybe raise a family, impoverishing our nation by pulling down our quality of life. We have also highlighted how property investment is creating a poorer quality Real Estate market, by leaving subdivided dregs, worth far less as an investment, for us. If the current generation haven’t had enough punishment from domestic pressure points, foreign investment has ramped up, particularly from wealthy Chinese investors, who are often seen at auctions bidding well above the reserve price, paying far in excess of the market value.

“We recently saw a Chatswood property sell for $450,000 over reserve and a 2 bedroom terrace in Hurlstone Park where bidding pushed the price past its listing at $750,000 plus, past our appraisal of $830,000 and on to sell at $892,000.” ^ⁱ

How do you, the working Australian compete with that? How do you, who is the bread and butter of the Australian economy, the teacher, the paramedic, the researcher, the builder, the nurse, the factory floor worker compete with that?
As one Australian notes,

My partner and I have been looking for a new house in Sydney’s lower North shore area for the last 3 – 4 years. At auction after auction, we are out-bid by Chinese / HKG bidders who were bidding significantly above and beyond reserve. Nearly all open houses these days have a Chinese speaking agent on hand to assist Chinese buyers who usually outnumber non-Asian buyers. Despite Sydney’s high property prices, it’s still way less expensive than Shanghai or Beijing property, with better returns. ^ⁱⁱ

2013 has seen a sharp rise in prices, which seems to have coincided with a rapid increase in activity from Chinese investors. While they are still a minority of the investor percentage, their zeal and willingness to pay far above and beyond market value has had a notable impact, pushing prices up and further locking us out of living the dream in our country. Few have failed to notice the massive increase in Chinese investor activity in 2012/2013.

Juwai.com, a website that lists homes around the world in Chinese, saw a 266 per cent increase in page views from China of Australian homes between January and August of 2013, according to the latest figures from the company. Australia is the second-most-popular destination for buyers from the mainland after the US, according to Juwai. ^ⁱⁱⁱ

Australia also has a property shortage and a comparatively small population.
From “The Australian”.

Chinese investment into Australian real estate has grown by almost 60 per cent in the past two years, with Chinese buyers and developers targeting Sydney and inner-city Melbourne. ^{^iv}

And from SBS

House prices are surging thanks to low interest rates and investor-led demand. Offshore buyers, mainly from China, are also becoming a driving force in the property market in Australia.
Ian Bennett from residential and commerical property firm, Colliers International, also thinks the level of demand from Chinese investors is just the tip of the iceberg.
“I’d say it’s really taken off in the last year and especially in the last six months.”
According to Colliers, Chinese investment in Australia tripled between 2007 and 2012.

Parts of the Melbourne market are booming too, thanks to demand from Chinese investors.^{^v}
Further alarming figures from news.com.au

Foreign buyers snapped up one in every eight new properties built this year – up from one in 20 properties in 2011, National Australia Bank research reveals. ^{^vi}

There are a number of reasons given for this sudden increase. One is that Australian property is seen as a safe investment, in particular, money placed in Australian property is seen as safe from changes in laws which the Chinese government might enact, or from confiscation. This seems plausible but doesn’t seem to match what we know about China. The idea that Chinese millionaires are scared of their own government just doesn’t add up. There are also Chinese who wish to buy property for their children, to gain permanent residency or to have a home ready in Australia should they have to move here in a hurry. (Such as in the case of political instability). All these reasons seem to not tie in with the narrative they we are given of China, that it is a growing global superpower, and the future economic locus of the world. We are told that this is the “Asian Century” and that our success is linked to Asia, mostly due to China, but that Chinese are trying to leave and move their wealth to Australia. Why such scepticism from the Chinese about China? A holdover from the Communist days? These are the reasons generally given in the mainstream media, which seem contrary to the vision of the “Asian Century” that we are given.
We have been informed of other potential reasons. One Chinese ex-patriot informed that much of the activity was due to money laundering. The now well known ‘empty’ cities, and the rampant purchase of foreign property may be in part an attempt to simply get rid of money quickly.

China’s corrupt officials and crooked businessmen have smuggled billions of dollars overseas, much of which has ended up in real estate in the United States, Canada, Australia and the United Kingdom—particularly in high-end neighborhoods in London, New York, Los Angeles, Sydney and Toronto. Now the Chinese government is embarking on a worldwide hunt to seize the properties with help from foreign governments, according to asset recovery and anti-corruption specialists. ^{^vii}

Even the argument that Chinese are buying property for their children may not be as it seems,

The soon-to-retire Chinese bigwig who has stashed money and relatives abroad in preparation for his escape is such a common character in China that it has its own phrase: luo guan, or “naked official.”
Some of them have laid the groundwork for years; one common ploy is to send a son or daughter overseas to a private university as a way to legitimize sending funds out of China. For example, the leaked Chinese central bank report on corruption showed that former ministry of finance official Xu Fangming deposited roughly 1 million yuan ($164,000) into the bank account of a son studying abroad. Perhaps not coincidentally, the number of Chinese students studying abroad has jumped in recent years. In the United States, it more than doubled to 194,000 in the 2011/2012 school year from five years ago. ^{^viii}

As there is much corruption in China, and its economy in some ways resembles a kleptocracy, there are a significant number of millionaires, who for some reason or another have ‘hot money’, which they must offload like a hot potato. Rampant building is an easy way to do it, and Australians seem eager to help out. So much so, that residential property development is now taking place, not to house Australians, but cash on in the Chinese gravy train.

TRACY BOWDEN: Under guidelines announced in late 2008, if a developer has preapproval from the Foreign Investment Review Board, 100 per cent of the apartments in a new development can be sold to foreigners.
MARTIN NORTH: So in some cases there are developers who are essentially building directly to sell to China and they’re advertising on websites over in China and using, you know, Chinese connections to be able to actually sell off the plan. And we’re also seeing other investors, some resident here in Australia and some resident overseas, looking at the high rise market and wanting to buy in as well. ^{^ix}

Another Australian writes,

I saw the advertising boards when I was in malaysia recently. They wanted people to move to australia provided they had the money to buy a house there. It was really that simple. Of course those adds (sic) weren’t aimed at the poor local malayans. It was aimed at the rich cashed up chinese as usual ^{^x}

Reports of such advertising boards in Asia are widespread. (Anyone with photographic evidence should email us here)
It is even more disgusting to realise that we are being pushed slowly out of own cities, to provide homes for Chinese, when they have whole empty cities in China awaiting them. If only Australians could have the same access to those empty cities that Chinese have to property here, but alas, that is not the case. So this is what it comes to. Australians moving out of the suburbs and cities they grew up in, commuting further and further for work and as a result spending less and less time, to offer infrastructure to people who have an over-abundance of it back in their country of origin.
The figures regarding this ramping up of Chinese investment confirm anecdotal reports of a sudden increase in the number of Chinese investors who are appearing at auctions. Australians have noted that quite often investors will fly into Australia, attend auctions and fly back to China. If they decide not to flout the laws and purchase the property themselves, there is likely a relative here willing to do it on their behalf. Also, bidding is aggressive and young couples looking for their first home and found that they have little hope. Foreign investment laws are routinely being flouted or circumvented, as non-residents get relatives or friends who are Australian residents to purchase on their behalf. It is probably also likely that non-residents simply purchase established property here in Australia, as there is little due process to ensure eligibility. This is easy way to get around the FIRB restrictions, essentially rendering the FIRB almost as good as useless in protecting the Australia market and protecting our interests.

Andrew Taylor, the Australian founder of Chinese property website Juwai, said Sydney, Melbourne and Brisbane were the most popular cities for Chinese househunting – but “Perth is really climbing fast”.
He said established homes were more popular than apartments bought off-the-plan.
But Mr Taylor said Chinese migrants were buying properties on behalf of family and friends living in China.
“Many international buyers will use their family and extended networks to purchase property in Australia,” he said from Shanghai.
“If they have a relative who is a permanent resident, there is no restriction in purchasing a property.” ^{^xi}

The statement about established homes being popular among Chinese investors matches what Australians in Melbourne and Sydney have observed.
In December 2008, to keep the property bubble inflated and avoid a market correction, Kevid Rudd announced changes to legislation that allowed temporary residents to purchase property in Australia without having to go through the FIRB. Rudd responded to the outcry in April 2010 tightening the rules again, after much public outcry, no longer making temporary residents exempt from being able to bypass the FIRB, but it was too little.

The outcry was so intense, that on the 24th April 2010, a tightening of foreign investment rules relating to residential property was announced, complete with a package of new civil penalties, compliance, monitoring and enforcement measures. The government even set up a 1800 hot-line for residents to report suspicious property buyers and help calm a heated public. It was sold to the Australian public as a reversal of the changes made in December 2008. But some are not convinced.
The problem is, there is no longer any transparency in the sector. ^xii

Real Estate agents perform little to no background checking for eligibility. One estate agency we spoke to, which seemed to specialise in the Chinese market stated that it was up to the purchaser to ensure they were eligible, and that they, the real estate company did not perform any checks. Without any government investigation or oversight, there is ample incentive to flout the laws. The Real Estate industry, that gutter industry which engages in practices which would land one in jail should they be practiced by another sector of the economy, is cheering this on..

Harry Triguboff, founder of the Meriton Group, was reported as saying that fifteen per cent of Meriton’s sales in 2012 were to offshore Chinese investors.
Mr Triguboff said:
“They’re not very concerned about the amount of return, they want to see capital gain, and I think that now with our dollar coming down… it will help us to sell even more.” ^{^xiii}

Mr Triguboff stated that one of his goals was to destroy the Australian dream of homes with yards. There are still a few Real Estate Agents who have some integrity.

TRACY BOWDEN: Sydney buyer’s agent and author Patrick Bright refuses to help non-residents find property here.
PATRICK BRIGHT: The reason the developers and that are chasing foreign buyers, be it wherever they’re from, is because they can get a higher price. I mean, why would you go to the effort of trying to sell your local development internationally if you could sell it to locals at the same price? So obviously they’re getting more money for it.
MARTIN NORTH: So we’re seeing prices shoot away. First-time buyers are aren’t able to get on the wagon simply because they can’t afford to get in, and they might be saving half, but they’ve now seen prices slide further up the scale. ^{^xiv}

It would be of no surprise to us at all, to find out later that non-resident investors who have purchased established residential property. For a government to allow this, while Australians are hurting from watching their dreams of establishing a life for themselves fade away, is beyond the pale.
Conflict of Interest: A stable economy versus a free lunch
Property is treated like a religion here, with fixation on property porn (Hot Property/Hot Auctions, The Block, Selling Houses Australia, Escape to the Country, Grand Designs), a seemingly unexplainable love of putting property to auction for sale (a practice which is generally rare in most other countries) and perks for investors unmatched in most other countries (negative gearing). One of the reasons that the Australian property market did not fall when property markets around the world did perhaps have more to do with our relatively increased level of insanity and mania regarding property compared to other nations. That is, a peculiar insanity and obsession with property may be the only thing holding the property market afloat. It is defying all fundamentals, and by all rights, should have fallen. It seems that foreign investors have caught the mania. Either the Chinese are correct in property being a good investment, or they are being foolish. It seems the latter may be the case.
As discussed in previous articles, property booms create an illusion of wealth. As our countries economy seems to be little more than housing speculation, our national wealth is largely illusionary.
George Soros in 2010 said if the Australian housing market didn’t burst, then it would be the first time in history. ^{^xv}It hasn’t burst as yet (Feb 2014), but may be to early to call this the ‘new normal’. George Soros also did predict a drop in the value of the Australian dollar and is now predicting problems for the Chinese economy.^{^xvi}Problems that perhaps have been a long time coming. If the Chinese economy goes, and it likely will, this will spell havoc for ours. George Soros is not the only one who has reservations about our property ponzi scheme and the stablity of our banks. Matthew McLennan, who is a fund manager in New York for First Eagle Investment Management, stated that he won’t touch Australian banks because they are too risky and due to the high level of private sector debt (among the highest rates in the world).^{^xvii} Joe Hockey said that Australia was a long way from a bubble, which indicates to us that Joe Hockey is completely and utterly, hopelessly clueless. Perhaps Joe Hockey was trying to talk up our economy by denying the obvious and boosting ‘confidence’, but if this how the Liberal Party ensure our economic success, then this just vindicates Mr McLennans decision to leave Australia as an investment target alone. Any country run by a treasurer displaying such ignorance is risky indeed.
The Bubble
The graph below shows the anatomy of a typical asset bubble.

We can see that there are actually two peaks, with a small ‘dip’ in between. Recall at about 2009-2010 the property market was starting to falter, and prices were slowly deflating. It looked like the boom may be over, but prices quickly shot up again. “Return to Normal” is exactly how the property industry is calling this rise in prices after the lull at the end of the last decade. Perhaps we are now at the second peak in the ‘blow off phase’. If this is the case, then the message to any investor holding property for capital gains is strike now while the iron is still hot.
The image below shows property prices, and bears a noticeable similarity to the movements of an asset bubble in the graph above. ^{^xviii}

You can see, particularly in Sydney, Melbourne and Perth, the cities most affected by the bubble, the peak in 2010, the drop (bear trap) and the second peak (the new normal).
Who wants to take a bet now that it will be “different this time”? Who wants to stake a few hundred thousand dollars that the movement of Australian property price is not the movement of asset prices in a bubble? Do you want to bet your life on the “New Normal” actually being a new normal and that Joe Hockey is correct. For those who are withholding purchasing property and boycotting the industry, if you can afford to wait, it may well be worth it.
This means that the Chinese investors are either foolish, willing to strengthen their foothold in Australia and have a place here for themselves at whatever cost, or know that somehow this investment opportunity will defy logic and pay off. The first two options are probably the most likely.
Unfortunately, we cannot be sure of anything. There remains the possibility that prices won’t fall, that the government will do what it takes to keep the bubble inflated. They have done well so far, and perhaps can hold out longer, but to do so would involve further destruction of our nation. It would involve impoverishing future generations, turning our children and grandchildren into renters who have no stability, at the mercy of greedy landlords. Renting is common in Europe, but European renters and rights and protections that renters here can only dream of. Protection from sharp rent increases, and the ability to sign long term, decades long leases. A nation of renters can work in countries like Germany, where renters have almost all the stability and security that home-owners do, or in cities like New York, with their famous rent control, but not in Australia where leases are short term, or month by month, and where there is on rent control. We are too obsessed with property as a get rich quick scheme to worry about ensuring that our residential property effectively provides homes for our nation (people). An obsession that a nationalist government would quickly put and end to with various policy changes including an end to any foreign investment in Australian residential property.
The future: We are on our own.
When one is a Nationalist, one takes on a more pessimistic view of the world. A nationalists loses faith in multiculturalism and does not expect our multicultural “brothers” to have the same desire to advance our nation that we do. One of our Nationalist Alternative members noted that groups dedicated to protecting our environment, our way of life, of halting our slide through rampant population growth are almost completely comprised of white people. One can see people from old traditional European immigration sources taking an interest in politics and the future of our children and country, but when it comes to immigrants from non-traditional sources, they are conspicuously absent.
We are supposed to believe that we are all one, that we all have the same shared fate, that we are one nation. One cannot help but notice though that this is not the case.
The fact of the matter is, that investors in real estate really don’t care about the country, and this goes doubly for foreign investors. They will do what is best for them, and doesn’t in any way include affordable and decent housing for us in our own country. Australians are hurting, but we should not be under any illusions that these investors buying up our properties are swayed by the disgust and sense of hopelessness that afflicts the young Australian generation with regards to this abominable situation.
For example, at the Chinese New Year festival in the city, there were no less than four stalls dedicated to selling Australian residential properties to China. A festival, paid for by our tax dollars, supposedly to celebrate our “multicultural Melbourne”, being used to hawk of properties which we are told were built to meet our needs, to people who don’t really need them. Even worse, the signs were all in Chinese. Born in Melbourne and wanting to live here? These aren’t for you.

This is a stall for “Central Equity” ^{^xix}. According to the chap manning the stall, they don’t bother checking whether investors are eligible to purchase the properties they sell of not. They leave that to the investor. They are selling apartments in Lonsdale Street.

This was a stall for “elite”, www.ereal.com.au, located at 268 Russell Street, Melbourne. An ostensibly Australian company that also has strong ties with Asian markets.

With over 50 staff in 11 offices throughout Australia, China and Asia pacific, Elite has the experience and capacity to develop and manage a wide variety of real estate products and services. ^{^xx}

Another stall celebrating “multiculturalism” by selling homes to a select audience. Again, Aussies need not apply. This may be your city and your land, but this isn’t for you… This appears to be 4C Realty, located at 401 Docklands Drive, Victoria.

Four C Realty have a strong network in Australia, Malaysia and the People’s Republic of China and have established very good working relationships with many VIPs and businessmen who travel to and conduct business in Melbourne. Four C Realty has developed strong relationships with well known developers, builders and architects within Australia. From our other business relationships, we have gathered useful database of our potential customers who are keen and interested to invest and stay in Australia for real estate business purpose. ^{^xxi}

We understand that business is business, but we also understand that we are being played for fools. This is the real face of diversity, competing ethnic interests, racial competition and hypocrisy. We are not highlighting these stalls to attack business, but to point out that while we are subject to propaganda with smiling faces of ‘diversity’, all happy together singing “we are one”, the stark reality confronts us in the streets. That in the middle of a festival, supposedly cultural, there were multiple stalls, targeted at Chinese and Chinese only (based on the lack of English on the signs) to sell Australian property to festival participants. These festivals are held up as examples of cohesiveness, of the success of diversity and how Australia’s multicultural experiment, unlike the rest of the world “is different here”. But these images show a different reality. We could understand stalls targeted solely for the Chinese community where were selling things of specific interest to them (such as niche Chinese goods, etc.), but when its something that all Australians are crying out for, homes, it is frankly offensive and disturbing.
In the end, they may quite likely be taken out by a property market crash, as predicted by Harry Dent.

Harry Dent, a widely respected economist and demographer who has predicted a range of economic events including the 2008 global financial crisis, pointed to falling affordability in Melbourne and Sydney where prices are ten times the average income.
“Bubbles ultimately peak when the people buying can’t afford to buy it,” Mr Dent said.
“Melbourne has been, actually, the biggest bubble in recent years and I would expect the biggest burst there. ^{^xxii}

Nevertheless, Chinese investors continue to display their, ahem, business acumen and continue to buy up here.

CHINESE property investors are expected to gallop into the Year of the Horse thanks to the year’s encouraging symbolism of immediate success.
In anticipation of sales growth, real estate agencies are launching websites exclusively at the Asian property market.
One of Australia’s largest Chinese property portals, ACproperty.com.au, last week launched a new Queensland section to coincides with the start of the Chinese New Year.
Sales and marketing director Esther Yong said it had experienced a 180 per cent increase in search queries for Brisbane and the Gold Coast in the past three months. ^{^xxiii}

A window into the minds of Chinese financial genius…

Yong Real Estate Sunnybank sales agent Tom XiaoYi said Chinese buyers were a very confident group in Australia and the new year’s auspicious symbolism would only increase their activity.
“Many buyers will use the year of the horse’s meaning of immediate success as a turning point with better things still to come,” Mr XiaoYi said. ^{^xxiv}

Perhaps there is hope for us yet. This has Japan circa 1990 written all over it.
Only an organisation loyal to OUR interests can hope to see us through the coming turmoil.

ihttp://www.realestate.com.au/blog/foreign-buyers-snapping-up-aussie-real-estate/

iihttp://forums.whirlpool.net.au/archive/2120699

iiihttp://www.smh.com.au/business/property/chinese-buyers-fuelling-sydney-property-hotspot-demand-20140129-31m1b.html

ivhttp://www.theaustralian.com.au/business/property/chinese-new-wave-rocks-property-market/story-fn9656lz-1226747147870

vhttp://www.sbs.com.au/news/article/2013/11/06/chinas-appetite-aussie-real-estate-sparks-boom

vihttp://www.news.com.au/finance/real-estate/cashedup-chinese-swoop-on-aussie-bargains-before-next-boom/story-fncq3era-1226704103879

viihttp://qz.com/143017/beijing-goes-hunting-for-overseas-real-estate-by-corrupt-officials/

viiihttp://qz.com/143017/beijing-goes-hunting-for-overseas-real-estate-by-corrupt-officials/

ixhttp://www.abc.net.au/7.30/content/2013/s3900440.htm

xhttp://www.ozpolitic.com/forum/YaBB.pl?num=1385544330/45

xihttp://www.news.com.au/finance/real-estate/cashedup-chinese-swoop-on-aussie-bargains-before-next-boom/story-fncq3era-1226704103879

xii http://www.whocrashedtheeconomy.com.au/blog/category/foreign-investment-review-board/
xiiihttp://propertyupdate.com.au/chinese-property-investors-buying-up-australian-real-estate-in-big-way-michael-yardney/