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In a statement last week, the group said that the introduction of penalties, not only for those who purchase non-compliant properties but also for those who aid such a purchase, are a good step.
“Any measure that can help to reduce the occurrence of such fraud should be encouraged,” the statement said.
“The proposed application of a more severe civil penalty regime to third parties who ‘knowingly assist a foreign investor to breach the framework’ has broad potential application and will be a closely watched development.
”It has the potential to extend to real estate agents, banks facilitating the flow of purchase monies from offshore, banks providing mortgage finance and even conveyancers and legal professionals.”
CoreLogic RP Data observed overall that the recommendations are largely within the framework that currently exists, ensuring that foreign buyers only purchase homes which are newly constructed.
“There are some concerns that the additional administrative fee to screen foreign buyers will act as a disincentive to investment; however, reports suggest the fee will only be $1,500,” the group said.
“In our opinion, it is unlikely that such a nominal fee on such a high cost purchase will make a difference.”
With increasing cooperation between state land registries, and the development of a national e-conveyancing platform in recent years, the group welcomed the development of a national register of land title transfers that records the citizenship and residency status of all purchasers of Australian real estate. CoreLogic RP Data called it an “important and achievable initiative” to provide increased transparency in relation to foreign investment in real estate through the provision of timely, accurate and reliable data.
“Importantly, the recommendations ... should not be viewed as a deterrent to continued foreign investment in the Australian housing market, with residential construction activity being a key contributor to Australia’s economic growth, with housing starts in 2014 now approaching 190,000 units,” the group said.