Media Release – Friday 29 August
The problem with foreign investment in Australian residential real estate is not that it occurs, but that it is largely self-regulated and inadequately monitored by Government, according to First National Real Estate chief executive, Ray Ellis.
Mr Ellis was attending a House of Representatives Standing Committee on Economics hearing at Parliament House today. The Committee is conducting an inquiry into foreign investment in Australian residential real estate.
‘Australia has long depended upon migration and foreign investment. It’s vital to a thriving economy in a country with a comparatively small population’ said Mr Ellis.
‘However, there appears to be evidence that some wealthy foreign investors have been purchasing existing homes and leaving them vacant to avoid detection by the Foreign Investment Review Board (FIRB)’.
There is currently an $85,000 fine for breaching the law but some investors reportedly regard the fine as a low-risk ‘cost of doing business’ and, as reported in The Australian, the FIRB has not prosecuted a single foreign buyer for breaching foreign ownership rules – which aim to stop foreigners buying existing Australian homes.
Mr Ellis believes this issue requires regulatory attention and that the Australian Bureau of Statistics, FIRB and Reserve Bank need comprehensive data to better understand the extent of non-compliance.
‘Foreign developer investment, when compliant with our laws, creates jobs and benefits the construction industry. However, if foreign residential property investors believe they can buy existing properties and leave them vacant, to avoid detection, this is clearly against the rules and objectives of the FIRB scheme and measures should be put in place to address this cavalier attitude’ said Mr Ellis.
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Issued by: First National Real Estate
For further information contact: Stewart Bunn, National Communications Manager, First National Real Estate, on 1800 032 332