*A-Class Business: Foreign investment in Aus* Foreigners buying Australian Properties need closer watch said MP. Australia needs to better enforce restrictions on foreign investment in housing, a lawmaker chairing a parliamentary committee on the issue said, amid concern overseas buyers are stoking a bubble. The Foreign Investment Review Board, or FIRB, which oversees rules governing such property purchases, “has demonstrated that they have not been doing their job in that regard,” Kelly O’Dwyer, chairwoman of the House Economics Committee, said at the Bloomberg Summit in Sydney today. “In order to give confidence to people you have to have a regime that will be properly enforced,” O’Dwyer, a member of parliament for the Melbourne suburb of Higgins, said. “FIRB said that we think everybody is complying a little bit better. I think that defies credibility.” O’Dwyer’s committee is conducting an inquiry into foreign buying of Australian residential property and is expected to report on its findings by Oct. 10. Chinese buyers are leading a surge in foreign demand for Australian homes as they seek to mitigate political and economic risks at home, educate their children overseas and live in a clean environment, according to an August report by CLSA Asia-Pacific Markets. “We’re seeing quite a bit of new foreign investment into new dwellings,” Treasurer Joe Hockey said at the same Bloomberg event. “That may well continue for some time, certainly if the Aussie dollar comes off a bit.” Australia tightened rules on foreign investment in real estate in 2010, requiring offshore buyers to purchase only new properties, and introduced penalties to enforce the changes. It also said temporary residents must obtain approval from FIRB to buy homes, and must sell when leaving the country. -No Prosecution- Prospective buyers inspect a house for sale in the suburb of Eastwood in Sydney. Australia is the No. 1 destination for Chinese seeking to emigrate after Canada. “There has not been a prosecution, there has not been a divestment order issued against anybody since 2006,” O’Dwyer said. “There has been a failure of leadership in FIRB.” Australia is the No. 1 destination for Chinese seeking to emigrate after Canada, which in February implemented restrictions on foreign investment and immigration, according to the CLSA report. Australia approved almost A$25 billion ($23 billion) of home purchases by foreigners in the nine months through March, 45 percent more than permits granted over the entire previous fiscal year, the Treasury department said in a submission to the inquiry. “We are looking at a civil penalty regime that would apply to people who contravene the rules,” O’Dwyer said. “We are actually looking at a sliding scale that would attach to the value of the property when people contravene the current rules in place.” The money raised from penalties would help equip FIRB to gather more comprehensive data to base policy decisions on and enforce existing rules, she said.
Posted on: Wed, 17 Sep 2014 02:14:03 +0000
Trending Topics
Recently Viewed Topics
© 2015