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Should foreign investment controls apply to the real estate? - Case study: the Australian experience

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  • Nicolas M. Karanikolas

Abstract

All major industry sectors have been captured by the globalisation effect. Up until the early1970s, the worldís financial sector was predominantly operated under a fixed foreign exchange regime, which brought about regulated capital flows across borders. Most dealings in the financial markets were due to trade, which was also subject to relatively high tariff protection. The past thirty years has witness a deregulation of financial markets opening the way for large international capital flows and at the same time lowering of tariffs, leading to a large increase world trade. The effect had been, to see $billions moving across borders leading to a current turnover of over $1trillion per day in the foreign exchange markets. Trade accounts for less than 10% of this turnover, the balance being taken up by professional dealing, investment (including real estate), financing and speculation.These deregulations have also affected real estate markets. Many of the industrial countries have allowed foreign investment to flow into their property markets, but many of these countries still have some form of control. This paper will examine the arguments for and against foreign investment and the gradual easing of controls for such investment. The paper will use Australia as a case study to show the easing of its policy on foreign real estate investment and the reasons for maintaining some controls.

Suggested Citation

  • Nicolas M. Karanikolas, 2001. "Should foreign investment controls apply to the real estate? - Case study: the Australian experience," ERES eres2001_194, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2001_194
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    References listed on IDEAS

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    1. repec:arz:wpaper:eres1995-114 is not listed on IDEAS
    2. Alireza Dehesh, 1995. "Property Cycles, Financial Markets and Global Economy," ERES eres1995_114, European Real Estate Society (ERES).
    3. Jeannie Yih Yun Yang & Nicolaas Groenewold & Moonjoong Tcha, 2000. "The Determinants of Foreign Direct Investment in Australia," The Economic Record, The Economic Society of Australia, vol. 76(232), pages 45-54, March.
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    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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