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Fast Money & Foreign Objects
The crackdown on Australia’s property sales comes amid concern that Asian investors are bidding up prices
ENLARGE
Residential properties stand by the waterfront in the suburb of Point Piper in Sydney, Australia. The government is cracking down on foreign property investors. PHOTO: BLOOMBERG NEWS
By
VERA SPROTHEN
May 2, 2015 1:15 a.m. ET
9 COMMENTS
SYDNEY—The Australian government has toughened penalties to stop foreign investors from illegally buying homes in the country’s overheating property market, saying those breaching investment laws would face three-year jail terms and fines of as much as 637,500 Australian dollars (US$500,400).
The bid to crack down on money illegally flowing into Australian real estate comes amid growing public concern that wealthy Asian investors are bidding up prices, making the country’s property market increasingly unaffordable. House prices in Sydney alone have risen 14.5% in the year to April, according to property-data provider Corelogic RP Data.
While stressing the government remained “pro-business and pro-investment,” Prime Minister Tony Abbott said at a press conference Saturday that investment rules needed to ensure “that the foreign investment we need really is in Australia’s national interest.”
“There is no doubt that if we have foreigners illegally coming into the existing residential property market, that is driving up prices,” Mr. Abbott said. “What we want to do is to ensure that illegal foreign investment is not unnecessarily driving up prices.”
RELATED
Australia allows foreigners to only buy residential property in development and excludes them from purchasing homes already built, but signs are mounting that the current system is fraught.
In March, the government ordered the sale of a Sydney waterfront mansion that was unlawfully bought by a Chinese-controlled company. Treasurer Joe Hockey on Saturday confirmed the villa was being resold and said authorities were investigating around 100 similar cases of alleged system abuse.
China has become the biggest foreign-investor group in Australia, overtaking the U.S. for the first time and spending A$12.4 billion on Australian real estate alone last financial year, the government said this week.
“We don’t want to depress property markets,” Mr. Abbott said. “We want to ensure that locals are getting a fair go, that the playing field is at least level and, if possible, slightly tilted towards locals.”
http://www.wsj.com/articles/austral...oreign-property-investors-1430543741?mod=e2fb
Residential properties stand by the waterfront in the suburb of Point Piper in Sydney, Australia. The government is cracking down on foreign property investors. PHOTO: BLOOMBERG NEWS
By
VERA SPROTHEN
May 2, 2015 1:15 a.m. ET
9 COMMENTS
SYDNEY—The Australian government has toughened penalties to stop foreign investors from illegally buying homes in the country’s overheating property market, saying those breaching investment laws would face three-year jail terms and fines of as much as 637,500 Australian dollars (US$500,400).
The bid to crack down on money illegally flowing into Australian real estate comes amid growing public concern that wealthy Asian investors are bidding up prices, making the country’s property market increasingly unaffordable. House prices in Sydney alone have risen 14.5% in the year to April, according to property-data provider Corelogic RP Data.
While stressing the government remained “pro-business and pro-investment,” Prime Minister Tony Abbott said at a press conference Saturday that investment rules needed to ensure “that the foreign investment we need really is in Australia’s national interest.”
“There is no doubt that if we have foreigners illegally coming into the existing residential property market, that is driving up prices,” Mr. Abbott said. “What we want to do is to ensure that illegal foreign investment is not unnecessarily driving up prices.”
RELATED
- Australia Orders Chinese Company to Sell Sydney Mansion
- Think New York Housing Is Expensive? Try Wollongong
Australia allows foreigners to only buy residential property in development and excludes them from purchasing homes already built, but signs are mounting that the current system is fraught.
In March, the government ordered the sale of a Sydney waterfront mansion that was unlawfully bought by a Chinese-controlled company. Treasurer Joe Hockey on Saturday confirmed the villa was being resold and said authorities were investigating around 100 similar cases of alleged system abuse.
China has become the biggest foreign-investor group in Australia, overtaking the U.S. for the first time and spending A$12.4 billion on Australian real estate alone last financial year, the government said this week.
“We don’t want to depress property markets,” Mr. Abbott said. “We want to ensure that locals are getting a fair go, that the playing field is at least level and, if possible, slightly tilted towards locals.”
http://www.wsj.com/articles/austral...oreign-property-investors-1430543741?mod=e2fb
