16-05-2014, 08:44 PM
Fear factor of foreign investment hits home
Nick Lenaghan
597 words
16 May 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Alarmed by rising house prices, home owners and investors have locked horns with property developers over the impact of foreign buyers in the Australian market, in submissions to a parliamentary inquiry into rules on offshore investment into residential housing.
Chaired by Liberal MP Kelly O'Dwyer, the high-profile inquiry into foreign buyers of Australian property was set up in March as property prices were surging.
Sydney prices have added almost 17 per cent in the past year, and the median house price in Sydney has passed $800,000 for the first time.
Concern about foreign investment has grown alongside the booming market and the increasing prominence of Chinese buyers. The inquiry is due to report back in October on the economic benefits of foreign investment in residential property and whether that investment is increasing the supply of new housing.
"Foreign investors are surreptitiously getting around existing rules and buying multiples of the best existing homes in Australia," said one anonymous submission to the inquiry.
"This is having a devastating effect on local residents because they cannot gain access to these properties."
Another joint submission from Justin Brooks and Cheriece Johnson, based in Liberal National MP Saxon Rice's electorate of Mount Coot-tha in Brisbane's inner west, urged the inquiry to focus on the existing home market rather than new dwellings.
"We believe that foreign investment into new dwellings increases supply of existing homes and jobs but the alternative has a greater impact on affordability," they wrote.
"I'd also like to note that many countries are rife with corruption and the fact that myself and Cheriece, hardworking Australian tax-paying citizens who play by the rules, are competing against someone who's money could come from suspicions practices in other countries, is simply unfair and we ask for a level playing field [sic]."
Against such passionate views from the street level, property industry groups have called for calm and warned against exaggerated claims.
The Real Estate Institute of Australia has discounted the influence of foreign buyers in the established market as "negligible".
On its analysis of foreign investment figures, offshore investors, including those from Asia, accounted for a mere 0.1 per cent of dwelling stock in 2012-13.
REIA chief Amanda Lynch said there had been a "beat-up" about foreign investment, with most attention on Chinese buyers in the residential sector.
"There is a fear factor, of being taken over by foreign investment. When we look to the facts that argument does not stand up," Ms Lynch told The Australian Financial Review this week. "It's very much an emotive response which is all part of this beat-up. There's a lot coverage about Asian investors. We're keen to have a reality check."
Billionaire developer Harry Triguboff echoed those sentiments and called on the inquiry liberalise rather than restrict existing foreign investment rules.
"If Australia wishes to keep housing affordable and to keep developers building, it is imperative that we embrace foreign investment in real estate and the certainty it can bring to industry," the Meriton Group managing director wrote.
Mr Triguboff said it was "excessive local government planning requirements and fees" that pushed up cost of housing and pushed first-home buyers out of the market.
The Property Council of Australia said Australia's foreign investment rules were already amongst the toughest in the world.
"Consequently, these rules do not need to be changed but their application could be considered as part of the review," it said.
Key points
Fairfax Media Management Pty Limited
Document AFNR000020140515ea5g0000v
Nick Lenaghan
597 words
16 May 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Alarmed by rising house prices, home owners and investors have locked horns with property developers over the impact of foreign buyers in the Australian market, in submissions to a parliamentary inquiry into rules on offshore investment into residential housing.
Chaired by Liberal MP Kelly O'Dwyer, the high-profile inquiry into foreign buyers of Australian property was set up in March as property prices were surging.
Sydney prices have added almost 17 per cent in the past year, and the median house price in Sydney has passed $800,000 for the first time.
Concern about foreign investment has grown alongside the booming market and the increasing prominence of Chinese buyers. The inquiry is due to report back in October on the economic benefits of foreign investment in residential property and whether that investment is increasing the supply of new housing.
"Foreign investors are surreptitiously getting around existing rules and buying multiples of the best existing homes in Australia," said one anonymous submission to the inquiry.
"This is having a devastating effect on local residents because they cannot gain access to these properties."
Another joint submission from Justin Brooks and Cheriece Johnson, based in Liberal National MP Saxon Rice's electorate of Mount Coot-tha in Brisbane's inner west, urged the inquiry to focus on the existing home market rather than new dwellings.
"We believe that foreign investment into new dwellings increases supply of existing homes and jobs but the alternative has a greater impact on affordability," they wrote.
"I'd also like to note that many countries are rife with corruption and the fact that myself and Cheriece, hardworking Australian tax-paying citizens who play by the rules, are competing against someone who's money could come from suspicions practices in other countries, is simply unfair and we ask for a level playing field [sic]."
Against such passionate views from the street level, property industry groups have called for calm and warned against exaggerated claims.
The Real Estate Institute of Australia has discounted the influence of foreign buyers in the established market as "negligible".
On its analysis of foreign investment figures, offshore investors, including those from Asia, accounted for a mere 0.1 per cent of dwelling stock in 2012-13.
REIA chief Amanda Lynch said there had been a "beat-up" about foreign investment, with most attention on Chinese buyers in the residential sector.
"There is a fear factor, of being taken over by foreign investment. When we look to the facts that argument does not stand up," Ms Lynch told The Australian Financial Review this week. "It's very much an emotive response which is all part of this beat-up. There's a lot coverage about Asian investors. We're keen to have a reality check."
Billionaire developer Harry Triguboff echoed those sentiments and called on the inquiry liberalise rather than restrict existing foreign investment rules.
"If Australia wishes to keep housing affordable and to keep developers building, it is imperative that we embrace foreign investment in real estate and the certainty it can bring to industry," the Meriton Group managing director wrote.
Mr Triguboff said it was "excessive local government planning requirements and fees" that pushed up cost of housing and pushed first-home buyers out of the market.
The Property Council of Australia said Australia's foreign investment rules were already amongst the toughest in the world.
"Consequently, these rules do not need to be changed but their application could be considered as part of the review," it said.
Key points
Fairfax Media Management Pty Limited
Document AFNR000020140515ea5g0000v