Foreign property ownership in OZ revealed as critics renew calls for tougher stance on buyers
Revelations that foreign property buyers bought $14.9 billion worth of houses and land in Australia last year, including $2.49 billion worth of existing homes, is resulting in more calls from curbs on overseas investors.
The Federal Government refused to release these figures recently when asked to by journalists but they were in quietly posted on the Foreign Investment Review Board (FIRB) website last week.
They show that the Government issued 4827 real estate approvals to foreign investors last year for commercial and residential properties. About half the approvals were for temporary residents wanting to buy a house as their principal residence.
A further 988 approvals were granted to investors to buy vacant land for residential subdivision or to build a houses. The report also shows Victoria is the most sought after state by foreign investors wanting residential real estate, followed by Queensland and New South Wales.
But the figures are incomplete because the Government changed the rules in April last year so foreigners no longer had to notify the FIRB if the property was to be their principal place of residence. Under foreign investment laws, non Australian residents can buy a dwelling for their principal place of residence but the Government has been criticised for relaxing foreign investment laws and they are being blamed for driving up house prices.
The Australian Government has now announced it will adopt a more stringent approval process so that fewer foreigners will be able to buy and acknowledging that they had pushed up residential real estate prices. Foreign buyers will have to sell when they leave the country and those who ignore the new rules face heft penalties.
Critics say the new rules do not go far enough. Opposition politians are calling for a comprehensive study of foreign real estate investment.
‘In one sense, little has changed. Foreign residents can still purchase Australian properties and, in particular, people in Australia on temporary residence visas can still purchase existing dwellings,’ explained Immigration-law specialist David Stratton.
Foreign owned companies are also allowed to buy properties to house their Australian based staff and a developer can sell an unlimited number of dwellings, either off the plan or newly constructed, to foreigners, provided the properties are advertised locally.
In 2007/08, the main foreign buyers were from the US, Britain and the United Arab Emirates. The following year, Singapore investors topped the list, followed by the US and Britain.