this post was submitted on 15 Oct 2024
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Foreign buyers. Simple as that. Buying a property here ensures safety of their money (talking about China specifically). Whether it's buying through a shell corp or a local agent/entity, those places are not there to be lived in. They're just there to safeguard cash.
Not to mention to beef up a property folio for an agency and artificially inflate the value of the building.
From memory, foreign ownership rules have tightened up, but there's plenty of loopholes still.
The land tax component is getting severe for property banking of this sort. Most of Melb's accountants are in panic mode right now with their property investor/developer clients going apeshit over the new requirements. Especially when their trusts need to have a specific 'no benefit to foreign residents' requirement bolted on. There are five different pieces of legislation that discriminate benefits from trusts/super funds going to foreign residents - and the definition of foreign resident is very very broad when you look at all the five Acts.
Ooh, I knew there was changes but not the significance of them. Thank you!
For sure, that's the target market - but the trick only works if the property holds that value in the first place. I don't see 9.3M value here, no matter how you twist and stretch it.
Even if the price drops by 50% when selling, that's still 4.5 million AUD, which is much safer than the CCP taking away all your assets and liquid funds in China.
The security is worth the potential drop.
We may not see it, but banks and buyers will. Those are the parties that matter. It's an absolute shit show but that's the unfortunate reality.