You can’t keep a good rent seeker down. Hot on the heels of Treasurer Scott Morrison’s suggestion that he might look to tighten foreign investor rules by requiring conveyancers to check purchasers’ entitlement to buy property before a sale, the Property Council of Australia (PCA) and real estate agents have hit back. From The AFR:
The Property Council’s Glenn Byres said putting any onus on lawyers to check the status of buyers was unrealistic, and the council was not convinced of the need for further changes.
“Our view for now would be we’ve just embedded a new regime, let’s see that it works because we think there are some powerful signals in there. So the concept of adding further administrative pieces to the pie, we’re not yet convinced of,” he said…
Century 21 chairman Charles Tarbey questioned whether agents should be responsible for a government issue. “The government should be responsible for it, not private enterprises,” he said…
“One buyer backed out of an auction when I told them I had to see their passports,” McGrath’s Jake Rowe said…
Ray White chairman Brian White said there could be privacy issues with the suggestions.
If I create a mobile phone account, I am required by law to establish proof of identity.
If I set up a bank account, I must go through a rigorous points-based test to prove my identity.
Same goes if I want to deposit $1,000 into a share account or a managed fund.
And yet these realtors think that it is offensive to require buyers to prove residency or show FIRB approval prior to purchasing a house – the biggest transaction in most people’s lives involving hundreds of thousands of dollars – and despite laws being in place to prevent them from “knowingly assisting” an illegal sale to a foreign buyer:
Let’s also not forget that Australia’s real estate gatekeepers are still not party to Australia’s anti-money laundering (AML) regime, despite the Government promising in 2003 that they would be brought under the regulatory net. And this comes despite warnings from the global regulator, the Paris-based Financial Action Taskforce, that Australian homes are a haven for laundered funds, particularly from China, and similar warnings from AUSTRAC.
In short, Australia’s real estate industry has been the Wild West for too long, permitted to turning a blind eye to illegal sales of property to foreigners. It’s time to rein them in.
