Oz launches investigations into foreign real estate buyers

Housing Minister Tanya Plibersek said foreign investors were allowed to buy new houses in Australia but there were restrictions on what people were allowed to buy and there was anecdotal evidence there might be problems.
 
‘The 50 cases have been selected to confirm whether they have met the strict criteria to purchase property in Australia,’ declared assistant treasurer Nick Sherry, as the government sought to calm a rising storm over the issue, particularly claims that Chinese buyers are snapping up property.
 
But critics point out that treasurer Wayne Swan has eased restrictions for those on temporary visas, such as business owners and foreign students, to allow them to buy any home to live in, land to build on or a new dwelling for investment purposes.
 
The problem is that no one knows how many properties are owned by foreigners. There is, however, an urgent need to compile figures of foreign investment in the residential property market, according to Robert Larocca, research manager at the Real Estate Institute of Victoria.
 
One hotspot is Melbourne where popular suburbs are attracting the biggest investment from overseas, particularly areas with a high concentration of private schools. One real estate agency in the city, Marshall White, now has a Mandarin speaking salesman after it saw an increase in buyers from mainland China and Hong Kong.
 
The agency says Chinese buyers now account for a third of its sales and some streets in the eastern suburbs of Kew and Balwyn are now 80% Chinese owned. The Chinese regard prices in Australia as a bargain compared with real estate in China where prices are also soaring.
 
But the surge in foreign buyers is seen as a major obstacle to the government’s efforts to make dwellings more affordable to Australians, particularly amid claims of a shortage in new housing.
 
‘There is a significant number of Asians seeking properties in areas such as western Sydney but I get the sense it’s all a bit at the margins of the overall market,’ said Chris Curtis, managing director of Curtis Associates, a Sydney company that negotiates property deals on behalf of buyers.
 
Increasing prices are also making property less affordable and although Australia’s central bank is considering raising interest rates to slow down the market this won’t affect foreign buyers whose money is not sourced in the country.