Apartment projects are at risk of not commencing construction as developers are unable to satisfy the financier’s requirements for pre-commitment, in response to changes to foreign investment regulations and taxation.
Unit developments ‘on verge of being mothballed’
Australia’s building industry is facing a crisis as overseas investors retreat following changes to foreign investment regulations.
“The message that has been picked up in China and seconded through our client base is that Australia doesn’t want Chinese investment,” Mr Gunning said.
“This could turn around and bite the state government in the backside because it will have a flow on effect on new off-plan sales if the Chinese think they are not welcome."
According to Mr Gunning, the construction industry is currently one of the biggest employers in NSW, and the state government can’t afford to have a downturn in this significant contributor to the economy.
“While the changes to stamp duty, land tax and increase in compliance powers granted to the ATO as well as rules to ensure foreign residents meet their capital gains tax liabilities aren’t unreasonable, the message is what is of concern,” he said.
“We should really be welcoming investment from China and the stability that it creates for our state and nation. Chinese investment should not be considered a threat and should be encouraged. We are not facing an invasion from China, but instead are seeing a group being singled out.”