Politics and policy: Chinese money and its impact on the regulation of residential property in the West

The narrative of Chinese real estate investors in some western jurisdictions reads like this: China has in recent decades, enjoyed burgeoning wealth creation across all strata in society. Chinese buyers are attracted to a ‘westernised’ education for their children, an agreeable and law-abiding civic society all whilst living in a clean and pleasant environment. Western real estate markets are seen as safe havens and bringing about portfolio diversification. This flood of Chinese wealth has impacted residential housing markets resulting in locals being outpriced. To combat unaffordability and housing shortages, governments have had no choice but to impose regulatory measures preventing foreign (mainly Chinese) capital from overrunning the market. Is this story cogent? Have these phenomena truly led to rich property valuations in cities in the West? Some governments have been quick to politicise the issue of Chinese buyers, blaming them for the lack of housing affordability in their cities despite scarce supporting data. In other cities, there appears to be much stronger evidence that Chinese buyers have indeed precipitated local housing problems. In this paper I challenge the propriety and logic of some of the articulated housing policies which have led to legislative amendments made by governments in Australia, New Zealand and Canada, purportedly in response to the fact that Chinese nationals have been driving up prices in their residential markets. Where appropriate, the paper also makes suggestions how this ‘problem’ could be better managed.