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I would need numbers to be able to agree with you that foreign investment isn't a driving factor in housing costs.

• ACow_Adonis 9y ago
  Wouldn't you also need numbers to arrive at the implication that foreign investment is? The numbers, at least historically, have always been hard to find, but the macro economic theory and indicators are generally quite boring and straight forward: employment stays high and household incomes improve, interest rates drop, lending and leveraging increases to household, supply is inelastic, house prices rise. Everything lines up pretty well, so why look to blame foreigners (who, even at the most generous estimates on what data does exist, are still a minority).
  • chris_wot 9y ago
    If the numbers are hard to get, then it’s difficult for you to say whether foreign investment is or isn’t part of the problem.
    • sushid 9y ago
      That's literally what your parent commenter is getting at...
    • ACow_Adonis 9y ago
      Well, one can use ockhams razor and plug the aggregate finance stats and household numbers in for each country: foreign investment will likely be related to the residual. That is, whatever amount is left over after domestic statistics and aggregate lending are taken into account. We don't have an accurate primary source for foreign investment, but we can reason. The rba website would be my first stop in aus for aggregate finance stats available publicly. The Abs has some construction/hiding investment data, but there are some issues with definitions you'd need to take into account. And our neighbors across the pond, although I'm not a kiwi, I imagine will have very similar structures and data. Additionally, such a simple model explains house prices quite well since the 1990s, across various markets with various levels of foreign investment, so we would need very good reasons to insert a "foreign investor" cause in there.
• msie 9y ago
  People in Canada blame foreigners too for house prices in Vancouver and Toronto but recent surveys show that foreigners only make up about 10% of purchasers. We've had low interest rates too and a vibrant economy. The federal government raised interest rates, changed mortgage terms and increased fitness requirements to stop people acquiring mortgages they can't afford.
  • soperj 9y ago
    yeah but 10% is huge when you consider that's all inflow, not people selling one house to purchase another, not to mention historically low vacancy rates in both cities.
    • dzhiurgis 9y ago
      You might be right. Parent OP doesn't specify if it's 10% per year. Compound growth would be huge over several years. Also, Auckland has had probably more immigration than Australia, at least for the last few years. That said, dropping prices by 10-20% would mean absolutely nothing for an average labourer.
      • soperj 9y ago
        It's per year. Before the foreign buyer tax in Vancouver, there were parts of the city where 20% of purchases were made by foreigners (Burnaby and Richmond).
  • Spooky23 9y ago
    10% is a lot for driving market prices.
    • vidarh 9y ago
      10% is a lot for driving market prices only if they live in those houses or leave them empty or massively overpay. But most foreign buyers in these markets are buying to profit, and rent out the properties, and so only really contribute to balancing rental and sale prices.