The federal government needs to clamp down on overseas sellers of second-hand Australian property to foreigners.
It is estimated that over 90 per cent of China-based companies selling Australian property are unlicensed to do so and consequently do not have an understanding of the rules applicable to this market sector.
Overseas sellers of Australian property are the primary cause of the second-hand property market’s problem. The federal government has chosen to focus on foreign purchasers breaking foreign investment rules, but has completely ignored the sellers.
In many cases, overseas property agencies selling Australian property have never been to the country, are not licensed and do not understand Australian rules controlling second-hand property transactions. Hundreds of properties are being sold illegally and this needs to stop.
Treasurer Joe Hockey recently announced that over 195 home purchases were being investigated for allegedly breaching Australia’s foreign investment rules. Up to 60 investigators have been deployed to check the compliance of these with Australia’s foreign investment regulations.
We support the government tightening its investment rules around second-hand property purchases. However, its primary focus should be on people illegally selling property. Proper regulation in any market is critical to ensure unlawful behavior is eradicated.
Ausin has spent thousands of dollars in each state acquiring real estate and financial services licences to enable company representatives to sell and offer informed financial advice to the Chinese market about Australian property. Many foreign purchasers are being unfairly tarnished with the same brush as those not following Australian law, which is most unfortunate.
The government needs to adopt a holistic approach to this problem, which includes the implementation of legislative changes to ensure all overseas, as well as local, agents selling Australian property must hold the appropriate licences to do so.
Many unsuspecting foreign buyers of Australian property are getting caught up in a tangled legal web which could be eliminated if the agents selling the property were appropriately regulated.
Investors based in China and new immigrants from China purchased nearly $9 billion worth of Australian residential property last financial year, according to Credit Suisse. This is a 60 per cent increase on the previous year.
Chinese demand for Australian property is here to stay. We need to ensure the right messages are being sent to foreigners regarding investment in Australia. The federal government needs to continue to police unscrupulous buying and selling activities and allocate more resources to this area. Importantly, the government needs to ensure those complying with the rules are not penalised.
The construction industry in Australia is currently this country’s largest economic stimulator and creator of jobs. Significantly, this reality is mainly fueled by foreign investment. We need to welcome and support foreign investment and take steps to further strengthen this position to ensure Australia as a nation maximises the economic gains that accrue from it.