New Restrictions on Foreign Owners in Australia to Stop Bubble

In the United States we are still working through a surplus in housing and the builders are sitting on the sidelines. In Australia they are fighting a shortage of 200,000 homes and are seeing housing prices skyrocketing.

One of the ways they are trying to combat housing prices going beyond the ability of typical homeowners to pay is to tightly control foreign ownership of homes in the country.

“We want to make sure that foreign speculators are not going to force up prices for Australians seeking to buy their own home, buy their first home, and we think this is the right course of action,” said Rudd, who faces an election within a year.
Australia will back up the changes with compliance, monitoring and enforcement measures including civil penalties, Assistant Treasurer Sherry said in a statement today. These include compulsory sales of property purchased in breach of the new investment regime, Sherry said.
Temporary residents will be required to start construction on undeveloped land within two years of purchase or be forced to sell, he said. The tighter rules will also apply to people on student visas, Sherry said. via BusinessWeek

Australia has always held a different view of government than we have. They are more concerned with protecting the little guy while in the United States we have been more free wheeling with our view towards business.

You can see this as it has stifled growth to the point that builders are not going to take risks being caught with too much housing inventory and thus have built too few units for the population at large.

Yet, they did not suffer the bubble we did, and now are doing all they can through their government to keep housing prices reasonable.

Which system do you think makes more sense?

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