It was good to see the ALP making an effort this week to extract data from a reluctant NSW Government about the level of foreign citizen buying of housing and land in NSW since 1 July 2016.
Note: For the period (decades) prior to 1 July 2016, there is no data recording foreign ownership of NSW land because our dimwitted politicians did not direct the OSR to require identification from buyers and sellers. Yep, no records were kept.
However, it quickly became clear that the ALP needs to keep on digging and pushing Premier Gladys “Secret Squirrel” Berejiklian and Treasurer Domininc “I knowz nothing” Perrottet to cough up the data so the public know what is going on and there can be an informed debate.
Accordingly to newspaper reports the Office of State Revenue provided data, pursuant to the Freedom of Information request, for the period 1 July 2016 through to 30 September 2016 only.
That period provides no real guidance as to the overall level of buying by foreign citizens (offshore and temporary residents) because most purchases by those two groups that were already in the “pipeline” were dragged forward and “stamped” before 1 July 2016 to avoid the new stamp duty surcharges.
As the Glass Pyramid noted at the time, when the Office of State revenue was still releasing this important data (click here for details of the cover-up that started in November 2016), there were very few transactions that attracted the Foreign Buyer Stamp Duty Surcharge.
Here are the details of the Foreign Buyer Stamp Duty Surcharge transactions for July – September 2016. (click transferdutytotal_17 to see the full data block downloaded from the OSR website when it was released).
As can be seen there were relatively few transactions that attracted the Foreign Buyer surcharge.
July: 9 transactions
August: 56 transactions
September: 95 transactions
Not exactly a flood? So no need to panic huh?
It is important to keep in mind that the surcharge is only payable by Foreign Buyers who are offshore (and are only entitled to buy new property) and Foreign buyers who are a temporary residents (and who are entitled to buy both new and existing property).
Foreign Buyers who are permanent residents do not have to pay the surcharge stamp duty and thus any purchases involving them do not appear as surcharge attracting transactions.
What happened after September 2016?
That is an excellent question and why the ALP and all other concerned citizens must demand that Gladys “Secrets” Berkijilian release the full data on purchases of NSW property by ALL foreign citizens (offshore, temporary resident and permanent resident) EVERY MONTH and publish it on the data and statistics page of the NSW Office of State Revenue.
It seems likely that the number of transactions attracting the Foreign Buyer surcharge surged after the very slow start between July 2016 and September 2016 because both the Premier and the Treasurer went to some pains to make it clear that they know they need to do something very soon.
Vague sounds about doubling the surcharge stamp duty and land tax for foreign buyers in the next budget. Why wait Gadlys? If the data is clear act now. Surely you aim to do more as Premier than “Do Nothing” Turnbull.
If there was no surge in purchases by offshore and temporary resident foreign buyers in the months after September 2016 why would they be conceding the need for action?
Oddly they were singing from slightly different song sheets, with Gladys inferring that she loved foreign buyers buying up the state and she just wanted to milk them more heavily while the Treasurer muttered something about affordability that implied he thought higher stamp duty surcharges and surcharge land tax might scare away some foreign property speculators.
Anyway there would be no need to speculate about surges if Ms Secrets and Sargent Schultz just cut with the secrecy and released the data that the people of NSW are paying them to collect.
All members of the NSW Parliament including the Liberal and National Party back benchers should be banging on gongs and insisting this data is released immediately.
Full details of land and housing purchases by:
- Offshore foreign buyers
- Temporary resident foreign buyers
- Permanent resident foreign buyers
So what was the ALP talking about when they said over 11% of the buyers were foreign ‘citizens’.
It appears that they were including transactions that involved foreign citizens that are permanent resident and not just counting those foreign citizens/buyers who are off shore or temporary resident and liable to pay the Foreign Buyer stamp duty surcharge.
To this extent the ALP and the Premier/Treasurer were talking about slightly different things. The ALP were talking about ALL foreign citizens/buyers but the Premier/Treasurer were talking ONLY about foreign citizens/buyers who were liable to pay the surcharge.
As foreign citizens/buyers who are permanent resident are not subject to pay the surcharge they had no reason to alter the timing of their purchases for stamp duty reasons, during the months of July, August and September, and that may explain why they did show up in significant numbers 11% during those months. Their behaviour did not change.
But it does suggest that once the purchases by offshore and temporary resident foreign citizen/buyers recovers from the “slump” during the introduction of the surcharges the overall figures for purchasing by foreign citizens will rise and may rise significantly. The Premier and Treasurer are probably already aware of this but are choosing not to reveal the data.
Incidentally, there is no harm in including permanent residents in the analysis because the Australian government has been handing out permanent residency with great enthusiasm since John Howard created the great “Asylum Seeker” diversion and opened the front door to some of the greatest immigration intakes in Australian history. It would not hurt for the Australian public to know the land and housing ownership figures for all categories of foreign citizen – offshore, temporary resident and permanent resident. It should be noted that many of the migrants during the early years of the Howard population boom would be Australian Citizens by now and naturally would not show up in the data.
However, Geoff Winestock of the Australian Financial Review was very upset this morning, for no compelling reason, that the ALP were mixing foreign citizens who are permanent residents – who hang out in Australia on a long term basis – with the more recent “fly by night” types of foreign citizens, presumably offshore and temporary resident, and thought “dangerous” but unspecified stereotypes were being played to.
Would those stereotypes include that foreign citizens are crowding young Australians out of the housing market?
Interestingly Mr Winestock did make reference to Chinese rules relating to foreign ownership of housing in China. As the AFR helpfully provided a pointer to page 33 the Glass Pyramid turned to that page to learn more!
So what would China do?
What would China do if it found that the prices of housing in one of its cities was exploding and causing distress to its citizens?
Well the article at page 33 of today’s AFR was most helpful. It appears that China has not hesitated to restrict and manage the purchase of housing in China by foreign citizens.
So it would appear that even China does not hesitate to intervene in the housing market to ensure that the locals are not completely over run by out of towners and speculators.
RELEASE THE DATA GLADYS!
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