Australia has ordered the foreign owners of 15 illegal homes to sell up immediately.

The controversy surrounding illegal property purchases in the country has been going on for several years, following concerns that the boom in overseas Investment, particularly by Chinese buyers, was pricing locals out of housing by snapping up supply in cities such as Sydney. Indeed, Sydney has seen house prices surge a whopping 70.5 per cent since 2012, with values up 16 per cent in 2016 alone.

All overseas buyers must obtain permissiong from the Foreign Investment Review Board to invest in Australian real estate. Two years ago, the country took action by introducing stricter rules to clamp down on investment that breached that law. Now, after accusations of not enforcing the law, Australia’s government is stepping up its response one step further, by forcing the owners of 15 illegally-purchased properties to sell.

Reuters reports that Treasurer Scott Morrison has ordered property owners in China, India, Indonesia, Iran, Malaysia, the UK and Germany to sell their illegally-acquired assets. This takes the total number of forced sales since May 2016 to 61, with a total value of AUD$107 million.

“No policing” of foreign investment in Australia

21st July 2015
 

Sydney Harbour   Photo:   Wikimedia Commons

Foreign investment remains a controversial issue in Australia, as demand from overseas surges, sparking suspicion of illegal purchases. But new reports reveal that there is no Government Agency Routinely policing the law.

Last year, proposed foreign investment in Australian property doubled to $34.7 billion, according to the latest statistics from the FIRB, which were published earlier this year. China led demand, with $12.4 billion of proposed investment, double that of the USA.

In response, the government announced a series of new laws designed to crack down on potential illegal purchases of property, leaving unauthorised buying of real estate by non-residents subject to fines and possible prison sentences.

New reports from Australia’s Sunday Telegraph , though, reveal that while foreign investors should seek approval from the FIRB, no government agency routinely checks whether they have done so.

At the same time, there is no regular checking of registrations with FIRB against the list of actual property purchases. While the FIRB publishes annual figures showing how many applications are approved – and their value – it does not record figures for completed sales. Indeed, there is a “substantial difference” between proposed and actual investment.

Malcolm Gunning, President of Real Estate Institute of NSW, an agency that serves Chinese buyers, tells the paper: “We have never been contacted by any government agency. We ask foreign buyers the question if they have FIRB approval but it’s not up to us to police it.”