The Australian has continued its stellar reporting on the illegal purchasing of Australian homes by foreigners, uncovering that many pre-existing dwellings are bypassing Australian buyers and being sold directly to foreigners, in contravention of the Foreign Investment Review Board (FIRB) rules:
More than 100 real estate firms have sprung up in mainland China, exclusively selling Australian real estate — both fixed and off-the-plan — directly to wealthy Chinese investors, bypassing Australian buyers.
…many of the listings on the site — sydneyluxuryproperty.com — could only be accessed from a foreign IP address and were private or off-market listings placed on behalf of owners who wanted a discreet sale to a foreign purchaser.
Simeon Manners is just one of a swag of firms offering Australian fixed housing to foreign buyers. Under Foreign Investment Review Board restrictions, the agents are not breaking the law but the buyers potentially are…
Adelaide firm DG Real Estate’s Simon Hou said his firm sold many properties… to wealthy mainland Chinese investors and had not had the FIRB reject an approval in recent years.
To test The Australian’s claims, I changed my IP address to Asia and searched the listings on one site, sydneyluxuryproperty.com, which revealed a swag of pre-existing homes being marketed to foreigners. Below is a small sample of the homes on offer, or which have recently sold:
The FIRB rules allow foreign non-residents to purchase off-the-plan housing, in a bid to boost supply, but precludes them from purchasing established homes. By contrast, temporary residents are allowed to purchase established homes, but are required to sell them within three months of leaving Australia. However, as noted yesterday, since 2010, FIRB has failed to prosecute any foreign buyer for breaching the foreign ownership rules.
Clearly, none of the above homes marketed on sydneyluxuryproperty.com are newly constructed dwellings. So how exactly are such sales permitted and why aren’t they being enforced by FIRB?
As Labor MP, Kelvin Thomson, has rightfully noted:
“FIRB is naive, under-resourced and doesn’t actually regard it as its mission to maintain Australian ownership of Australian real estate… Young Australians who can’t afford to buy houses are the silent victims of its neglect and indifference”.
Absolutely. Young Australians have a right to expect the government to implement measures to make housing more accessible by increasing supply, as well as clamping down on excess demand, whether from foreigners or local tax-advantaged speculators.
This includes adequate enforcement of the rules in place to prevent foreigners from purchasing pre-existing homes, as well as ensuring that homes purchased by temporary residents are sold upon exiting Australia.
As it stands, the foreign ownership requirements in Australia appear to be nothing more than window dressing, and are not being enforced. The integrity and confidence in the system is being undermined, in turn breeding unnecessary opposition and cynicism towards foreigners.
