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Abstract

This Working Paper attempts to explain the recent phenomenon of foreign investment into Australian property markets, with a focus on China.

Firstly this paper looks at the current emergent effects of China as a leading global economy, soon to regain the mantle of the world’s largest economy. A place it last held in 1847.
China is now the world’s largest trading power—and, by 2030, it is likely to be the biggest economy. The role of China, and other investor countries, is investigated from the perspective of potential long run stability of economic growth patterns.

Secondly the paper looks at the rise of the Australian economy on the global stage. How does the rise in overseas investor opportunities effect Australia? How will our economy accommodate the rise in property investment? And how does Chinese investment differ from other countries. Unaffordable global cities are experiencing dramatic house price rises. Attempting to discover the effects of investment in other countries this paper looks at issues of foreign investment in Vancouver, where the Canadian government has closed its investor stimulus schemes upon evidence of market distortion. What correlation does this have in relative terms to Australia’s property market and Significant Investor Visa Program (SIV) ?

Thirdly an argument is drawn that Chinese investment has rapidly overtaken estimations in both quantum and effect. Does the Australian government have adequate regulatory oversight? The macro-economic effect of Chinas relationship with Australia is unique, and likely to influence socio-economic conditions in this country in a significant way. Does Australia have a political will to change policy settings given that recent reports suggest that the Australian political class have substantial property portfolio’s which would appear to benefit from property price rises in overstimulated markets. 

Background

The scope of this paper is to discover evidence and quantum data relative to institutional and private funds invested in Australian markets at this time and to investigate the rise of wealth in China which will lead to further spikes in capital investment. Bringing …

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