The Rudd Government has today announced a crackdown on foreign property investors reversing many of the changes it made hastily in 2008 under the umbrella of “Administrative Changes” and imposing tougher penalties on anyone breaking these laws.
With house prices in decline in 2008, Wayne Swan made changes to the foreign investment legislation, allowing foreigners to more easily purchase property in Australia and underpinning the weak market. However, this lead to a surge of foreign buyers bidding up prices and locking many Australians out of purchasing their own homes.
Under the streamlining of the Administrative changes, temporary residents such as students didn’t have to notify anyone of their purchase. This made the problem extremely hard to monitor and measure with the government admitting they had no idea just how many foreigners were purchasing property in Australia. Real Estate agents are suggesting as many as 30% of purchases are by foreigners. This change and many others have been reinstated, and temporary residents must once again notify the Foreign Investment Review Board of their purchases and sell when they leave the country.
With a rapid decline in mortgage approvals in Australia since September last year, it has been thought foreigners have been filling the gaps. Any reduction in foreigners participating in Australia’s property market could lead to a fall in house prices over the coming months.
» Crackdown on foreign property ownership – AdelaideNow, 24th April 2010.
» New curbs on foreign home buyers – The Australian, 24th April 2010.
» Foreigners face tighter rules on property ownership – The Sydney Morning Herald, 24th April 2010.
» Australia for Sale – Who crashed the economy?, 27th March 2010.
» Government has no idea – Who crashed the economy?, 21st April 2010.