Shouldn't SG also control the buying of properties by foreigners?

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An honorable member of the Coffee Shop Has Just Posted the Following:

Foreign Buying of Australian Homes Needs Policing, Lawmaker Says

By Nichola Saminather and Narayanan Somasundaram - Sep 15, 2014
Australia needs to properly enforce restrictions on foreign investment in housing, a lawmaker chairing a parliamentary committee on the issue said, amid concern overseas buyers are stoking a bubble.

The Foreign Investment Review Board, which oversees rules governing such property purchases, “has demonstrated that they have not been doing their job in that regard,” Kelly O’Dwyer, chairwoman of the House Economics Committee, said at the Bloomberg Summit in Sydney today.

“In order to give confidence to people you have to have a regime that will be properly enforced,” O’Dwyer said. “FIRB said that we think everybody is complying a little bit better. I think that defies credibility.”

O’Dwyer’s committee is conducting an inquiry into foreign buying of Australian residential property and is expected to report on its findings by Oct. 10. Chinese buyers are leading a surge in foreign demand for Australian homes as they seek to mitigate political and economic risk at home, educate their children overseas and live in a clean environment, according to an August report by CLSA Asia-Pacific Markets.

Australia tightened rules on foreign investment in real estate in 2010, requiring offshore buyers to purchase only new properties, and introduced penalties to enforce the changes. It also said temporary residents must obtain approval from FIRB to buy homes, and must sell when leaving the country.

Civil Penalties

“We are looking at a civil penalty regime that would apply to people who contravene the rules,” O’Dwyer said. “We are actually looking at a sliding scale that would attach to the value of the property when people contravene the current rules in place.”

Australia is the No. 1 destination for Chinese seeking to emigrate after Canada, which in February implemented restrictions on foreign investment and immigration, according to the CLSA report. Australia approved almost A$25 billion ($23 billion) of home purchases by foreigners in the nine months through March, 45 percent more than permits granted over the entire previous fiscal year, the Treasurydepartment said in a submission to the inquiry.

Soaring Prices

House and apartment prices surged 11 percent in August from a year earlier, led by gains of 16 percent in Sydney and 12 percent in Melbourne, according to the RP Data CoreLogic Home Value Index. The nation has the third-most overvalued housing market on a price-to-income basis, after Belgium and Canada, according to the International Monetary Fund.
O’Dwyer, announcing the inquiry in March, cited concerns that “foreign investment in Australian real estate is causing a distortion in the market and making housing less accessible and affordable.” The inquiry is examining the economic benefits of foreign investment, whether it’s helping to increase supply, how it compares with other countries and if the nation’s foreign investment policy can be improved, according to the statement.




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