Merryn's Blog

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.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

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).

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.

Advertisement - Article continues below

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.




How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
House prices

UK house prices may be heading for a Boris bounce

The latest survey of estate agents and surveyors from the Royal Institution of Chartered Surveyors is "unambiguously positive" – suggesting house pric…
16 Jan 2020

Are UK house prices really on the rebound?

The latest house price data from the Office for National Statistics paint a picture of a housing market that is showing signs of rallying. That's not …
15 Jan 2020

UK property prices are in the doldrums

House prices barely rose in 2019. Good news, says Nicole Garcia Merida.
9 Jan 2020

Most Popular


Currency Corner: how high can the pound go against the euro in 2020?

In the month in which we should finally leave the European Union, Dominic Frisby takes a look at the pound vs the euro and asks just how high sterling…
13 Jan 2020

Where will markets be in 2030? Here are 20 forecasts for the 2020s

A lot has changed in the last ten years – stockmarkets soared, technology transformed our lives and politics has changed beyond measure. Here, Dominic…
14 Jan 2020
Personal finance

How much the state pension will rise by this year

While Boris Johnson promised to hold a full budget within 100 days of his election victory, many of the details of next year’s state pension increases…
10 Jan 2020

Money Minute Wednesday 15 January: UK inflation and house prices

In today’s Money Minute, we look ahead to the latest UK inflation and house price figures, plus we have Germany’s GDP data for 2019.
15 Jan 2020