Are foreign buyers responsible for skyrocketing property prices?（646 words）

By Judith Evans

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In recent years a flood of footloose international capital, much of it from China, has been searching for homes in which to invest. In parts of the world, however, that cash has become rather less welcome.

Over the past year, regional authorities in British Columbia in Canada and Australia’s New South Wales have both introduced surcharges aimed at overseas buyers of homes. They joined Hong Kong and Singapore, which already penalised foreign buyers. Switzerland, meanwhile, bans non-residents from outside Europe from buying altogether. In the UK, the stamp duty system has been overhauled to raise charges at the top end and add a surcharge for buyers of second and additional homes.

In most cases, such charges are aimed at cooling overheated markets and keeping homes affordable for domestic buyers.

Christy Clark, premier of British Columbia, which includes Vancouver, until last year one of the world’s fastest-rising property markets, said the administration would “make sure that we do everything that we can to try and keep houses affordable and to try and make sure that those very wealthy foreign buyers find it a little bit harder to buy a house in the Greater Vancouver area”.

Her 15 per cent surcharge for overseas buyers duly sent the market into reverse.

Are foreign buyers really responsible for skyrocketing property prices? The case of Vancouver suggests they play a role. Chinese buyers who inundated that market accounted for a third of property purchases by value, according to a study carried out by the National Bank of Canada.

In London, buyers who live outside the country make up only a fraction of the total but have aided market distortions in other ways. For example, there are now an estimated 10,000 surplus luxury flats in a city with a dire shortfall of affordable housing.

Globally, hostile measures aimed at foreign buyers helped to push the luxury housing market downwards in 2016 for the first time in five years, according to research company Wealth-X.

Still, there are countries, especially in southern Europe, that continue to welcome the cash and the broader involvement that goes with it. “Golden visa” schemes became popular as countries ravaged by the euro crisis sought rapid overseas investment; in countries such as Spain, Malta and Greece, a property purchase can still be used as a route to residency or even citizenship.

The case of Portugal demonstrates how countries can blow hot and cold on international property buyers. In 2012, it introduced a “golden visa” residency scheme that brought in thousands of buyers. But by last year, the system had come to a virtual standstill after legislative changes resulting from a corruption inquiry. Now, the country is planning to introduce a “wealth tax” on properties worth more than