No that was not my point. But you raise an interesting question. In fact Malaysia has put proper governance in place so that it is very difficult if not impossible for foreigners to acquire properties illegally in their name. The existing rules are also very clear. The State Consent process does a thorough job of screening out 'illegal' purchases and declining the State Consent.
So, lets look at the 2nd article (WSJ) first:
“The foreign investors involved either purchased established property without Foreign Investment Review Board approval, or had approval but their circumstances changed, meaning they were breaking the rules,”
- The point here is that the rules are not necessarily very intuitive and proper governance is not necessarily in place to prevent foreigners buying 'established' properties illegaly .....
Furthermore, the article also states:
The government has been under pressure to rein in an investment-driven surge in home prices in Australia’s two biggest cities Sydney and Melbourne, amid growing criticism that wealthy Asian buyers are making the property market increasingly unaffordable.
The central bank has warned the property boom is unbalanced and potentially dangerous to a fragile economy, as economists become increasingly nervous about the possibility of the country entering a recession for the first time in 24 years.
- This tells me that there is a property bubble driven by foreign investment. The government is under a lot of pressure to 'reign in an investment-driven surge in home prices in ... Sydney and Melbourne.' So, there is a high chance that property values will decline due to double whammy - the economy entering into a recession and increased foreigner restriction, even cooling measures.
Lets look at the 1st article:
Recently revised figures for April show that the country’s trade deficit with the rest of the world ballooned to a record A$4.14bn (£2bn). That gap between the value of exports and imports is expected to increase as the value of Australia’s most important resources reaches new multi-year lows. Iron ore is now trading at around $50 per tonne, compared with a peak of around $180 per tonne achieved in 2011. Thermal coal has also suffered heavy losses, now trading at around $60 per tonne compared with around $150 per tonne four years ago.
For an economy which in 2012 depended on resources for 65pc of its total trade in goods and services these dramatic falls in prices are almost impossible to absorb without inflicting wider damage. The drop in foreign currency earnings has seen Australia forced to borrow more in order to maintain government spending.
The respected Australian economist Stephen Koukoulas recently wrote of the dangers that escalating levels of foreign debt could present for future generations. Could a prolonged period of depressed commodity prices even turn Australia into Asia’s version of Greece, with China being its banker of last resort instead of the European Union.
- The point here is if Australia enters into a long drawn recession, there will be further drops in AUD given the increasing trade deficit and more importantly this will deeply impair the spending power of Australians. And guess what, in case someone needs to sell, as foreigners, they will be at the mercy of locals, whose spending power will likely be diminished given the looming recession, as by law the rich foreigners are not allowed to buy existing properties.
Frankly, between leaving property to your child and an education I would take leaving a legacy, so many older ah pek who barely earn $2k have paid up HDB, whereas dual income no kid grads have to pay 30 yr loan for HDB?????? Really makes no sense, degree so what? Buying a property cheap should be priority.
