Nyko Property’s founding director Bill Nikolouzakis believes foreign buyers are buying into the larger CBD projects that have little traction among local buyers.
“I think there’s a misconception of foreign owners pushing up [property] prices across the country and I disagree with that wholeheartedly,” Mr Nikolouzakis said.
“I think they buy in very different locations to what the average Australian buys in and they’re helping us build the infrastructure that we’re going to need in 20 or 30 years’ time when our population in Melbourne and Sydney grows rapidly to almost double.
“I don’t subscribe to the fact that they’re competing against Australians in any way in those property markets.”
Mr Nikolouzakis believes the driving force behind the price spike is the lack of supply in Sydney and Melbourne.
Both major parties have floated various policies to reduce foreign ownership in Australia, with the most recent being Labor’s proposal to double the screening fees on foreign investment in Australian property, as well as hefty penalties for foreign investors found to be doing the wrong thing.
Despite prices drifting into serious unaffordable territory, Mr Nikolouzakis warned against some of the fiscal reform kite flying that has been seeping out of Canberra.
“I don’t think changing negative gearing will benefit first-time home owners as much as people may think,” Mr Nikolouzakis said.
“Over a 10- or 20-year period, potentially that might mean property prices have dropped because more people buy, but in the short-term it does affect the cost of living and affordability of rental and I don’t think that’s a good factor.
“I think the most sensible discussion around changing negative gearing has been maybe limiting it to new properties only.”
He added that changes to negative gearing may inadvertently slow down the construction industry, reducing properties in the market and affecting employment.
Mr Nikolouzakis also believes allowing first-time home buyers to dip into their superannuation is a dangerous idea that only focuses on the problems of the Sydney and Melbourne markets.
“We’re talking about the Australian marketplace, but really it’s just Melbourne and Sydney that have got these issues,” he said.
“If you went to talk to a first-time home owner in Adelaide or in Perth at the moment, it’s probably a very different story to someone who lives in Bondi, Sydney.”