The global property bubble is fuelling protectionist policies

The latest wave of globalisation is driving politicians to impose local solutions that could damage global trade, says Merryn Somerset Webb.


New South Wales has introduced new taxes on foreign property buyers

A few weeks ago we published a piece on the global property bubble its causes and its consequences.

This week has brought news of another one of its symptoms: two Australian states have announced that they are toin an attempt to deal with fast-rising house prices (there has been a wave of Chinese money hitting the market over the last few years).

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New South Wales is to have a new stamp duty of 4% for foreign buyers and Queensland is to have one of 3%. New South Wales is also planning to charge a 0.75% land value tax on real estate investors.

The news comes hot on the heels of a government decision earlier in the year to block the sale of S Kidman & Co, a company that holds nearly 1% of Australia's land mass (25 million acres and 2.5% of its agricultural land), to a consortium of Chinese buyerson the basis that the sale would not be in the national interest.

The problem here is obvious the latest wave of globalisation has made money movement international. But politics is still (quite rightly) pretty local. That means that politicians feel obliged to come up with local solutions to block the perceived problems of globalisation and that those solutions are often (rightly or wrongly) protectionist.

This, clearly, isn't just about houses: the World Trade Organisation put out a report only yesterday noting that between mid-October last year and mid-May this year, G20 economies had introduced protectionist trade measures at the rate of five a week (affecting 5% of global imports).

This isn't yet a return to the 1930s (the last time a wave of globalisation was rejected by electorates and half of global trade was wiped out as a result). But it is worth keeping an eye on: given the mood around the world it could mark the beginning of something similar.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.