Are we concerned too much on foreign ownership of Australian property?


Maybe you are not, but more than 26,000 people have signed a change.org petition for tighter rules on foreign ownership of Australian property, according to Domain.com.au.

The boost to the number of signatories to the petition – there’s been a jump of 20,000 in a month – comes as the boss of a Chinese property website predicted foreign investors’ passion for Australian real estate was escalating.

“We predict Chinese property investment will increase in Australia by 15 to 20 per cent over the next 12 months,” Simon Henry, the co-CEO of Juwai.com told Domain in a video interview.

Mr Henry refers to a NAB survey that showed investment in NSW was dropping but increasing in Brisbane and Melbourne. He put this down to better marketing of their states and universities.

Mr Henry also discounted a common criticism of foreign investment – that overseas buyers were pushing up property prices and making it more difficult for first home buyers.

“The average price of a property a Chinese person is buying in Australia is around US$1.36 million,” he said. Far beyond the budgets of first home buyers.

The change.org petition, launched by Simon Hosking , says he is “not suggesting no foreign investment, but a more thorough testing of foreign buyers and purchases and a toughening of regulations by the Foreign Investment Review Board”.

He says that he would be unable to buy properties in China and there were strict restrictions in other countries such as Indonesia, Thailand, Sri Lanka and Singapore as well as other emerging economies.

FIRB’s current rules specify that foreign buyers are restricted to buying new property off-the-plan, though visiting students are able to purchase established homes during the period of their study.

A parliamentary inquiry in Canberra – led by Kelly O’Dwyer – is currently reviewing foreign investment and called for the FIRB to provide information on its investigations of any established property purchased illegally.

It’s been suggested the FIRB has not prosecuted a single case since 2006, though the FIRB has said there were 33 ongoing investigations.

Citing media reports, Mr Hosking claims that the rules are being exploited “by wealthy foreigners looking to park cash in the Australian housing market”.

“In many cases they are using their children studying in Australia, or lawyers or other service providers, as investor proxies.

“The latest figures from the FIRB show that foreign investors have doubled their purchases of Australian property in just one year with 5755 homes worth $5.5 billion bought in the nine months to March alone.”

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