From Mac Bank:
SIV suspended – new scheme to be introduced from 1 July – Last week the Department of Immigration and Border Protection (DIBP) announced the suspension of the Significant Investor Visa (SIV) programme until 30 June
2015. Any new nominations will be subject to the new complying investment framework, effective 1 July 2015. We believe concerns had centred on the nature of complying investment options in the scheme as well as whether checks were sufficiently robust in terms of the legitimacy of the applicants. This measure is the latest in a line of measures aimed at cooling the property market – The context of these changes is pretty clear. There have been several moves (e.g. clamp down on foreign buyers and limits on investor lending) by the current Government to slow the domestic property market, which has seen strong growth, particularly in Sydney and Melbourne. This is particularly interesting given the vehement denial of the need for such measures at both a regulatory/Government level until December last year.
The reforms push productive investment ahead of dead housing investment, which is restricted to 10% of the portfolio. Good policy.
On a wider note, it has occurred to me that the current blowoff in Sydney and Melbourne is not only the result of the February rate cut but a scramble by foreign buyers to get in ahead of tightening investment rules. Wider reform to housing investment is still under review with submissions closing on March 20. The new regime still has no date.
If demand is being drawn forward then it will tumble when the new rules come into effect but it’s hard to say.
