Industry slams proposed new foreign property laws

ScreenHunter_4329 Sep. 23 07.27

By Leith van Onselen

Industry groups representing accountants and real estate agents have slammed a proposal outlined last week by Liberal MP, Kelly O’Dwyer, to extend the penalty regime for illegal foreign investment in Australian residential property to those that aid and abet such purchases, such as accountants, lawyers and real estate agents. From The Australian:

Real Estate Institute of Victoria chief executive Enzo Raimondo questioned the need for change. “If you put in a system where you are fining accounts, lawyers and agents in an attempt to stop foreign investment or people skirting the legislation I don’t know if that is going to work,” he said.

CPA Australia head of policy Paul Drum said the call for new sanctions to apply to accountants was premature and “a third party cannot be responsible for what an investor does or doesn’t do”.

Thankfully, Ms O’Dwyer has dismissed their arguments as self-interested special pleading:

“We have to have the right penalty regime that promotes confidence in our foreign investment framework and that means that those people who deliberately contravene our foreign investment framework ought to face sanctions for doing so,’’ she said.

“Those advisers who don’t ­deliberately contravene our foreign investment framework have nothing to fear.”

To right. Under Australia’s foreign investment regime pertaining to residential property, non-residents are precluded from purchasing pre-existing dwellings, and temporary residents are required to sell their home within three months of departing Australia.

Yet, in eight years, the Foreign Investment Review Board (FIRB) has failed to make a single prosecution, leading to claims from Ms O’Dwyer that “there has been a failure of leadership at FIRB [and] FIRB has been asleep at the wheel”.

Meanwhile, extensive anecdotal evidence has been presented to the parliamentary inquiry on foreign property investment suggesting that non-residents are buying-up pre-existing dwellings en masse, in contravention of the rules, often with agents, accountants and lawyers turning a blind eye or facilitating such sales.

A simple solution to prevent these types of rorts is to require that buyers of pre-existing housing in Australia provide proof of citizenship/residency, with real estate agents required to highlight the rules at the point-of-sale and conveyancers required to check-off and report any breaches to FIRB at settlement, with appropriate penalties then applied.

It’s not rocket science.

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Comments

  1. Excellent and good work Kelly sticking to her stance.

    Every illegal purchase denies an Australian the chance to buy their own home. It is therefore fair & just that accomplices to this crime are denied a home of their own, should they own one. $500k fines, criminal convictions (including treason) and dishonourable discharge from their respective body (REIA, CPA/CA, the bar, etc) are a good start for 1st offences. 10 years jail time for subsequent.

  2. What a joke, it’s often the agents that are gloating in the glossy pages of the Domain about their latest adventure in landing a a great deal in flogging off pre-existing homes to another foreign buyer. Do they think the public is dumb?

    Agents only worried about losing their large commissions from aiding and abetting money laundering.

    • THIS.

      Any industry relying on commissions will always resist what’s best for the consumer.

      “and real estate agents have slammed a proposal ”
      Well, they would say that, wouldn’t they.

      Go Kelly, go.

  3. “If you put in a system where you are fining accounts, lawyers and agents in an attempt to stop foreign investment or people skirting the legislation I don’t know if that is going to work,”

    this will actually ensure that it works. Every REA should be required to ask for proof of citizenship or residency before sale.

      • TP is correct.

        The moment that the requirement is introduced as part of transferring title, agents acting for the seller or the lawyers acting for the seller will be demanding to see documentation establishing an entitlement to buy.

        And they will probably introduce a clause stating tgat the deposit is forfeited if transfer of title cannot be effected for that reason.

        Keep in mind that at the point that transfer is effected the sale has already settled.

        Handing over an executed transfer is what the seller only does when the bank cheque is produced.

        The real problem is the buyers problem.

        They have handed over the money and have a transfer of title they cannot register.

        Possibly they could be allowed to resell the property to a legitimate buyer.

        Or resell to the seller – at a discount.

      • It would be a problem DrX and Pfh, especially for those who are juggling finances between properties (upgrading etc). But, where there’s a little more flexibility on the vendor’s side, keeping the 10% deposit and the putting the property back on the market could be a winner.

        Put the due diligence onus back on the agents to ensure the buyer qualifies at sale time, otherwise come settlement, no transfer, no sale, no commission. Ban deposit releases so agents can’t get their cut before settlement. Its not like they’re digging trenches for their $12K commission on the average property.

      • doctorx “at that stage significant costs would already be accrued, and damage would be inflicted up on seller”

        So what? That will incentivise sellers to look for reputable agents, which is exactly as it should be. This will be self-policing (assuming the appropriate checks are applied at transfer, as Patrician suggests).

        This is no different to agents not abetting any other type of fraud.

      • Sorry, I misread the thread… but my PoV is that legal issues should be left to those who already deal with them. So conveyancers are the right people to enforce this, just as they would ensure that the buyer has appropriate finance in place etc. And the FIRB would need to do its job properly by establishing a mandatory reporting and auditing process to enforce this.

        Theres no need for agents to have the principal responsibility. If the appropriate framework is in place then they will end up checking this anyway as they wont want a botched sale, or any whiff of improprietary.

  4. There is no way of stopping foreign ownership of Australian property; like NZ property – that’s why we don’t have rules like yours!
    If you want to see a whole, or expanded, industry of “residents’ devoted to avoidance – firms/individuals who specifically hold property booked for foreigners – then fine. But laws were made to be broken – remember!
    (eg: Any of you who are Australian citizens can hold as many properties as you like, right? So if you buy, say, 1,000 second-hand houses and they are ‘funded’ by a non-resident, but you both have an off-shore agreement that the property rights reside with them, how do you get stopped from holding the 1,000 properties? You don’t…)

      • Definitely emotionally and morally. Fk anyone that does this.

        Is it legal to accept large funds from overseas of questionable origin?

        Is it legal to own an asset in the name of a false beneficiary?

        Is it legal to deliberately circumvent foreign ownership laws?

        Has tax been paid on the funds received?

        Is it legal to act in direct conflict to one’s country? (Traitor, treason, etc)

        Etc

        Any lawyers with a moral compass out there that can help answer this?

    • Janet,

      Sure rules can be broken but it would not be easy. How many off shore buyers will be happy with someone else’s name on the title.

      If they are their bank lending the money will not be happy.

      Easy enough to pass a law that such agreements are not enforceable. That means if your on shore buddy is a crook you can kiss your money good bye – remember you agreed that you would not be on title?

      Foreigners buyer property in Indonesia through local proxies and it can be a real pain in the butt when the proxy gets difficult.

      • Actually this raises a good point.

        Why are the banks lending to foreigners/non residents for the purchase of property in the first place?

        They would absolutely know that it breaks the law. Their 100 point identity check would easliy show up the non residents.

        There should be penalties for banks under the illegal lending practices/standards for being complicite.

    • Any such “off shore agreement” could be made illegal and property holders paid 50% commission for ratting out foreign purchasers.
      Funded by confiscated property

    • @Janet

      You are correct but there should at least be some kind of legal framework in place, for proxy holding/

      I sit here at my desk, 2 meters away from someone who does this very thing. He owns 4 properties for his wealthy parents who are not Australian residents or citizens.

      So how on earth do you police this.

      I say in the same way that the police investigate instances of unexplained wealth that may be proceeds of crime.

      The ATO would be suited to this if they’re staff numbers where not being butchered by flatulent joe.
      Automated searches on income vs home ownership.
      How exactly does a graduate accountant own 4 properties when his declared income is something like 50k a year and yet he still drives a merc to work ??

      Gotta start somewhere with this

      • Call the FIRB (and wake them from their snooze couches) as that dude 2m away from you is breaking the law IF he is not a permanent resident.

        Temporary residents are allowed to buy an existing property to live in. They are not permitted to build a property portfolio.

        But assuming that he is a permanent resident and his family off shore are happy to put their wealth in his name, I don’t think there is much we can do or should do.

        At least not until we have picked all the low hanging fruit:

        1. Non residents directly buying existing residences

        2. Temporary residents buying multiple residences

        3. Temporary residents not selling within 3 months of departure

        4. Temporary residents buying existing dwellings but not occupying them.

      • Suspect item 3 is going to be huge as unemployment slowly trends up and temp workers return home.

        Personally, if it was me, considering outlook for dollar, if I was leaving Oz and had a house that wanted selling, I’d be moving extra super quickly.

        #motivated_vendor

    • good points Janet, but we deal with dodgers already when it comes to terrorist financing, money laundering, tax dodges etc. Not to mention people who get away with murder, robbery etc. I suspect most foreign investors will go elsewhere rather than enter into dubious arrangements that may end up with their property being confiscated etc. Would you risk your money in such an arrangement when you could just go to Canada and buy outright? or buy a new property.

      .. we may also need to ensure that unit trusts can’t invest in existing property to avoid such a scenario.

  5. Can anyone explain to me if there is some sort of FIRB exemption in Sanctuary Cove In Qld…or is there just no concern?

    Here is a quote from a real estate agents page

    “FOREIGN INVESTORS.
    Foreign Investors who wish to purchase residential real estate within Sanctuary Cove do not require prior approval from the Foreign Investment Review Board. (FIRB).”

    The area has been there for some time and they are not new properties?

    • There is no checking what so ever. You could get off a plane from Mongolia or Turkmenistan today, have no ties here what so ever, and buy as much as you want.

      It is pure government endorsed treason designed to stop house prices from crashing.

      • And there we have it. Thanks Bluebird.

        The operative word here is treason.

        We will only see anything resembling real action counter to the rampant selling out of Australian citizens’ collective best interests, when/if Australian citizens actually begin to treat any and all those so involved, as treasonous.

      • Yep. Even if you were a member of ISIS I have little doubt you could buy up as much as you want and keep it, and the government would only put you in jail to look tough on terror.

        Big Australia is priority number 1 for Lib/Lab and the Greens. If anyone votes for any of these parties you are treasonous.

  6. The best remedy is to convict those who breach the act by summary prosecution, then proceed under proceeds of crime to seize the property, add the stamp duty and/ or capital appreciation and rents to the fine and fine those who ate knowingly concerned, and do that a few times. It would stop this continuing debacle overnight. Then have an audit with a reverse onus for the provision of documentation, going out with the rate notice with forfeiture for non compliance. Should do the trick.

    • I’d do it at a local level with federal grants for local councils tied to them auditing ownership of RE through the rates payment process……

  7. The biggest danger in this process is that KO’D is distracted/derailed by red herrings.

    Prosecuting REA’s is a red herring.

    Increasing fines is a red herring.

    They haven’t detected one illegal transaction in eight years FFS. What is the point of increasing the fines?

    As you say Leith, keep it simple stupid. Require proof of the purchasers compliant residency status on the transfer of title. No proof, no transfer. No exceptions.

    Foreign purchase approval for new builds only. No exceptions.

    But first Kelly can we please get the data?

    How many existing dwellings are owned by foreign nationals?

    How many existing dwellings were bought by foreign nationals in the last 12 months?

    Your inquiry has been going for 6 months Kelly. Why haven’t you started to collect the data?

  8. It’s odd to me that the Anti Money Laundering legislation cannot be expanded to encompass this sort of thing as well – throw AUSTRAC and the big guns at it and have it sorted once and for all.

    • +1 If for no other reason than monitering international criminal money-laundering, why aren’t accurate records of foreign purchases centrally kept and immediately available?

      • Furthering this it appears to be divergent from general Government behaviour to create a fairly simple set of rules without resourcing the means to enforce them (or at least advertise that they can)

        It really helps to show that either the FIRB are indeed toothless, or that political and commercial persuasion has hobbled their ability enforce their mandate.

      • 1. The FIRB are not toothless. They have more then enough penalty and enforcement powers. They have the full weight of the treasury at their disposal if required.

        2.In his evidence to the inquiry FIRB Chair Brian Wilson made no mention of being hobbled, in fact he thinks they are doing a good job and the concerns are ignorant and xenophobic.

        Wilson is not only asleep at the wheel but he is proud of it.

        After the public statements by O’Dwyer how can Wilson be allowed to remain in his position?

  9. “Want to buy property in Australia but you aren’t a resident? Are you a local real estate or legal professional that has the FIRB rules keeping you awake at night in case you get done for helping a foreign buyer? Do you want to hold onto that property you bought after you leave Australia?
    Look no further than…Acme Nominees! A 100% locally owned and incorporated Australian company devoted to maximizing your investment and reputation in Australia! Just call toll-free from anywhere in the world and let us ‘Do it right” for you….”

    • Janet the point is they don’t have to.

      A foreign national can walk into any australian real estate office today and buy an existing property in their own name.

      No one checks.

      • Maybe! But they aren’t supposed to be able to – that’s the point. And if ‘they can’ then whatever rules you think you have in place, don’t work. Whatever solution you think you can bring in to enforce ‘the rules’ also won’t work. For the same reason! People will ignore them one way or another – and if it costs “a dollar or two to use a conduit – so be it”, will be the response.

      • With all due respect Janet again you miss the point.

        The Australian land title system is controlled by govt.

        It is entirely within the control of govt to require one simple administrative step that cannot be “ignored”.

      • Eg. Make it a criminal offence to set up such a nominee arrangement. Penalty = forfeiture of the property. Proceeds fund enforcement regime.

        This is not hard. What’s hard is deciding to do it and overcoming resistance from powerful vested interests (almost our entire ruling class) who dread the popping of the bubble on which their entire financial future rests and will do “whatever it takes” to prevent this occurring. It’s this obstacle that is far more powerful than the difficulty of designing and running the system.

        Would it be perfect? Of course not. For example, do rich people pay tax? No, that’s for poor people. But even 80% success would make a big difference.

  10. Naive… no actually this steps beyond naive …maybe its a charade that’s strictly for entertaining the Sheeple.

  11. If foreign buyers are excluded from the existing RE property market this would ease the shortage of housing that is exercising Joe Hockey’s mind.

    Insert happy face. (I am going to get the grand kids to show me how to do HF’s when they stay next week.)

  12. I think there’s a big difference between aiding and abetting a foreign buyer in comparison to apathy over their eligibility.

    There will be a cost to monitor this and seems you are pushing for the RE industry to wear it (at least some of it).

    The situation is not so different from proposed changes to have ISPs monitor for copyright infringement.

    So to play devils advocate, my question for Leith is, how can you justify a crusade for the RE industry to bear the cost of this monitoring, but not for those in the internet space to police copyright infringement?

    • REA agent earns 2% on $1,000,000 sale = $20k

      Hours worked:

      2 hour preparing Marketing
      8 hours opening home (two sessions of one hour each week over a 4 week auction campaign)
      1 hour at auction
      5 hours miscellaneous of answering emails and phone calls

      Total hours worked = 16
      Rate per hour = $1,250

      Cost of checking compliance with purchasers, priceless.

      • Sorry, but that’s a complete copout.

        No cost to finding a vendor to begin with?

        No cost for running the office?

        No cost putting a receptionist on the front counter?

        Presume GST is included in the fee…

        Not every property sells for $1 million…

        Could go on, but won’t waste my time.

      • “8 hours opening home (two sessions of one hour each week over a 4 week auction campaign)”

        Try one hour on the open house – if a real estate agent needs more than one session to sell in the current market then they’re just not trying.

      • Maybe in the city.

        Allow me to reset these numbers.

        Marketing: 2 hours for window cards and 1/4 and 1/8 page ads. Another 2 hours miscellaneous adminstrivia — sales secretary/assistant.

        2 months on market, 4 inspects a month @ 1/2 hour, plus travel time.

        Phone calls, many. In excess of 5 hours.
        Phone calls to vendor.

        Administration in sending out property alerts to buyers.

        3% on 500k.
        Split that 50/50 with the owner of the business.

        Then if you’re operating on a debit/credit business in a regional area, chances are you owe the principal money on the books. If you’re in a a busy area or good agency, you’re making coin on commission, but certainly not 1250/hr. Not even close.

      • @ Labrynth

        “Cost of checking compliance with purchasers, priceless.”

        Price of relying on dodgy REAs to police their own sales, worthless.

      • Labrynth, you need to factor in the cost of advertising on RE.com, a portion of the $23 an hour assistant who misspells ‘oportunity’ in the copy uploaded to RE.com, the RP data subscription, $3300 per month lease, annual insurance, utilities, the agency’s $10,000 monthly marketing budget, the $5,000 per year for glamour head shots, plastic surgery, conferences, the BMW lease payments, the kids’ private school fees, repayments on the beach house, child support payments, skiing trips to Europe with the second wife, trips to Thailand with the mistress, donations to the local member. It all adds up.

        There’s a lot of work behind standing around at an open house, handing out brochures paid for by the vendor, talking up the ‘opportunity’, and getting your assistant to make an hour of follow up phone calls. Have you ever posed for glamour photos under hot lights, driven past bus stops to see your imaged defaced with Hitler moustaches ? Think you could handle that ?

        That 2%-2.5% commission isn’t all money for jam, and don’t forget, while house prices may have doubled in the past 14 years, technology in this sector has failed to keep pace, and the work required of an agent has at least tripled. Agents have never had to work harder for their leads. If anything, there is an argument that commissions aren’t high enough.

    • Sorry dude. It takes two minutes to check a passport. But I agree, the onus should be on the titles office. Can be fully automated at minimal cost.

      • Cost is not the time, it’s the lost sales when you have to turn a buyer down because they’re not eligible. No RE Agent worth his salt is going to make the mistake of discovering an ineligible buyer twice.

        😉

      • @BB

        But how many will the simple passport checks rule out? you need 100 points of ID to open a bank account, why not buy a house? Heck you can do it online for almost nothing, exemptions included.

        Edit:

        Q1: Do you have an australian passport?
        Yes? -Q2
        No? – Q3

        Q2: Do you have a trail of your money to buy said property?
        Yes? –This way sir, let me take your deposit check
        No? — Q4

        Q3: Do you have a letter from FIRB exempting you?
        Yes? — Q2
        No? — Piss OFF!

        Q3: Do you have clearance from FIRB/AFP regarding your cash?
        Yes? –This way sir, let me take your deposit check
        No? — Piss OFF!

      • @Bullion

        Mate if Apple can techify a watch, THE ENTIRE SYSTEM CAN BE AUTOMATED REMOVING MOST/ALL CONCERNS ANYONE RAISES HERE.

        Sorry for the capitals, I wished to highlight the fact that all the excuses for not doing this are seeing trees not the forest.

        Have you done etax lately? If something as unwieldy as the ATO can automate a lot of your tax and hang it all together, so can this be done.

      • “Heck you can do it online for almost nothing”

        Right, so why would the cost of developing and maintaining that system lie with the RE industry which was the nature of my question)?

        Perhaps all buyers should have to go through an online verification system provided by FIRB from which they obtain a document specifying what they are eligible to buy which can then be provided to the RE agent/conveyancer?

      • @BB

        I agree. But the passport check rules in or out most people. IF RE agents start asking for this, it will change the behavior of foreign buyers.

      • That’s if the buyer has a passport. Many citizens don’t have one. Maybe Passport, Birth Certificate, or FIRB exemption letter would be enough. It’s starting to sound similar to the stuff you are supposed to provide to an employer.

      • That’s if the buyer has a passport. Many citizens don’t have one. Maybe Passport, Birth Certificate, or FIRB exemption letter would be enough. It’s starting to sound similar to the stuff you are supposed to provide to an employer.

        I doubt the number of people buying a house without a passport is large! Can use any (or more than one) identification that confirms you are a citizen or permanent resident.

        It’s not rocket science and you have to jump through these hoops all the time!

      • The trouble is that there are very few forms of identification that prove citizenship/residency. And no, you don’t have to prove citizenship often. Identity yes, but citizenship rarely. I can’t really think of any case where one has to prove citizenship to a non-government entity. The government has plenty to cross-reference against. Personally I only had to prove citizenship once; when I applied for my passport.

        I know it’s not representative, but in my extended family, there are many more property owners than passport holders. And the intersection is not that big.

      • The trouble is that there are very few forms of identification that prove citizenship/residency.

        1) Medicare card.
        2) Centerlink card(s) – a myriad of these require PR or citizenship.

        Anyones, the simplest thing to do is to develop an online check like you can get for opening bank accounts. They can check the electoral roll, any of the above + passport etc etc and issue a certificate in the same name.

        Heck they can have this at the titles office and cross check. The point is, it is trivial to do, even for those without passports.

        Edit:

        If you don’t have a passport, medicare card etc or exemption, you can’t bid (bidders need to be registered in most states). Through checks to follow at titles office.

      • A medicare card does not prove citizenship or residency. http://www.humanservices.gov.au/customer/enablers/medicare/medicare-card/eligibility-for-medicare-card .

        I’ll admit I’m not too familiar with all the Centrelink cards, but if it’s anything like the health care cards or transport concession cards I’ve seen, it wont prove much.

        Having said that, a medicare card plus a birth certificate is probably enough. The number of people who are citizens and don’t have those documents but want to purchase property is probably vanishingly small.

    • Interesting point BB. I think it’s more aligned to a bottle shop checking for 18+ ID than the ISP issue.

      We cannot allow FIRE types and local proxies to facilitate illegal activity.

      • Interesting comparison –

        Bottle Shop fine for serving under, according to signs required for licencee to display at point of purchase = $5000. I’m guessing more than 1000 times the margin on a four pack of alcopops.

        Not exactly police priority number one, but certainly there are news items in local papers about police crackdowns resulting in fines and licence cancellation, so risk for bottle shop owner is real.

        Fine for RE Agent/ Conveyance etc needs to be at similar proportion. $5 million is absolute lowest.

      • @stat good points, I agree. I believe the police would be well supported by the community interests and also economically for pursuing these crimes.

    • @bb,

      There are countless industries which have rules restricting the sales of particular items where the front line sales people have a role to play in policing those rules:

      firearms & ammunition, tobacco, alcohol, pharmaceuticals, pyrotechnics, motor vehicles are easy examples to think of.

      The cost is irrelevant to the question really. Why should RE agents get special treatment?

      To me the test is whether enforcing foreign investment rules is in the interest of the community at large and are therefore worth enforcing. If it is, then point of sale is logical place to do it.

      To be frank, anyone arguing against enforcing copyright a particular way comes from a place of doubting the value of enforcing copyright at all.

      • Right, but in some of those cases the government has already provided an easy way to verify their eligibility (e.g. proof of age card for tobacco & alcohol, I don’t know enough about firearms, pharmaceuticals & pyrotechnics to comment).

        I’m not saying that the RE industry should not be responsible for a basic check if it literally only took a minute to photocopy evidence of eligibility. I’m saying there’s likely more to it given the various exemptions & checks that may need to be done. I’m saying perhaps there’s a role for government to play in making it less costly and easier for the RE industry (as mentioned above, perhaps a vetting process for all buyers to go through).

        But was also trying to draw a comparison between Leith’s argument here and the one he makes for policing piracy. They are similar scenarios, but with opposite arguments being made for who is responsible to monitor. There’s a lack of consistency, which is not necessarily a problem, as you say it may be Leith’s personal views coming through (morally objects to foreign ownership, but not piracy), that’s what I was interested in the answer to.

      • A proof age card actually effectively puts the onus on the purchaser.
        The analagous example would be a ‘Treasury Approved Purchaser’ card obtained by residents by asking Police to witness ID docs proving residency, or via a slightly longer process if not a resident.

        Shooter’s licence, driver’s licence very similar – seller does not conduct relevant tests, they are done at purchaser’s expense separate to purchase.

        Pharmaceuticals I was largely think of the process to limit pseudoephedrine sales by making chemists record names of purchasers from licence or equivalent. Similar to above.

        Then the onerous part is separated from the sale workflow, and no one has any complaint about burden.

      • I think the ‘Approved Purchaser’ card would be a better solution than expecting RE agents to do the checking. Fee could be charged to the purchaser for processing to avoid extra cost to government.

    • Is difference that one involves getting ISPs to police what are ultimately civil offences, whereas in this case the RE industry would be ensuring compliance with laws for which there is a criminal penalty for non-compliance.

    • Simple answer: the apparatus required to prevent copyright infringement is precisely the same apparatus needed by an omniscient police state. Both require you to observe all communications, and then prosecute based on the content. An effective anti piracy regime is an Orwellian state.

      Most proposed apparatus for enforcing property purchase laws is vastly simpler, more transparent, and effective.

      • I was just about to post something like this. Comparing the monitoring of communications to requiring a buyer to produce a document is an apples and oranges comparison.

    • So to play devils advocate, my question for Leith is, how can you justify a crusade for the RE industry to bear the cost of this monitoring, but not for those in the internet space to police copyright infringement?

      An ISP is a neutral third party providing a service that has zero vested interest in how that service is consumed and no way of ascertaining the legality of how its customers are behaving.

      A RE agent is an active participant in the transaction with a significant vested interest in the outcome and can quite easily ascertain the legality of that transaction.

      • I disagree there’s 0 incentive (on how it’s consumed).

        Most ISPs provide plans which cater for the amount of data used. Low policing of piracy is an enabler and results in people choosing a more expensive plan & data allowance.

        If there was a crackdown on piracy it would result in some users moving to paid content (in which the ISP may not notice a difference), some would continue as is (take the risk of being caught), other service users would choose to stop downloading content and would likely reduce their data allowance as a result.

      • Let me put it another way.

        The ISP plays no meaningful role in you deciding to go to http://www.thepiratebay.se (or whatever). Indeed, if you are using a VPN they quite literally have no way of knowing that you are browsing thepiratebay.se (let alone determining whether or not what you subsequently do is a copyright violation).

        In complete contrast, the RE agent plays an integral role in a transaction between the buyers and sellers of property, explicitly locating and recommending each to the other based on their requirements, and facilitating the entire process.

        If an ISP was running a torrent tracker and explicitly soliciting uploads of particular content based on its customers requests, you might have something approaching a valid comparison.

      • @BB Yes well if “it” was priced affordably, was of quality and was easy to access then piracy would naturally decay… these criteria are not dissimilar from housing.

  13. The problem is the current regulation isn’t being enforced, how’s more regulation going to fix that?!?

    Infact, across the board, this is the biggest failure of this government.

    There’s nothing wrong with regulation in financial planning, its just that they don’t apply it to the banks. Same goes with mortgage broking, the regulation would be tough if it were inacted.

    • Not a failure – a stratagem. A deliberate, cold, calculated stratagem.

      No one said that Ted Bundy “failed” each time he offed someone, or that the gulags were a failure of Stalin’s policies after all.

      • I think you are right, I remember a skit on “yes prime minister” about writing regulation to enforce the previous regulation that wasn’t being applied.

    • Listen to the loud protests. How telling.

      Effectively, FIRB has shown foreign kleptocrats and criminals that if you have the cash it is a lawless organisation that will look the other way.

      If you’re a miner or some other type of exporter to China, you should be very concerned. Since much of that money is being brought here to be laundered, this could one day blow up into political tensions between China and Australia that could have serious ramifications for Australia’s exporters.

      Leith, the title should be “FIRE squeals over proposed new property laws”.

  14. Housing property is the collateral behind all the debt. The trillions and trillions and trillions of global fiat debt dollars.

    Touch it at your peril. I reckon the PHC (politico housing complex) knows exactly what is going on now, they have to turn a blind eye while they try and figure out if there is an answer to this mess (which there isn’t)

    • “Housing property is the collateral behind all the debt. The trillions and trillions and trillions of global fiat debt dollars.”

      … and in turn, behind the quadrillion/s in notional “value” of derivatives bets (eg, Interest Rate, FX ‘swaps’).

      An unknown, but likely enormous quantum of which bets are “secured” against customer deposits as “collateral” — which “deposits” themselves are in fact not “money” but debt principal, typed into existence in the form of mortgage loans!

  15. Australian politicians DON’T bloody care, unless it affects them personally. Plus they are too bloody STUPID and ignorant to do the right thing by us.

    • Parliament is an institution of traitors, happy to betray fellow Australians to look after number one. Most are property investors and the main parties depend on FIRE donations. QED

    • It does affect them personally. They will lose money if the rules start being enforce – Mr Hockey and many others have sprawling property portfolios.

      There is nothing ignorant or stupid about what they are doing. Corrupt, immoral, yes, stupid, definitely not.

  16. Remember the houses sold without their owners knowledge? Highly embarrassing to the RE industry. Now REA has to do ‘100 point’ check on vendor before listing. Introduced without a murmur of protest ! Nobody I know in RE is complaining about the onerous workload.

    Similar process to check purchaser. No great effort for REA.

  17. Wait you need a 100 point identity check in order to open a simple savings account so you can stash away that extra $500, but purchasing a property that can add up to millions of dollars requires no checks at all?

    We are not mugs.

    Every step in the transaction should require confirmation of validity of purchase and the identity of the purchaser. No excuses. Starting with the RE Agents themselves.

  18. This initial squeak from the FIRE interests is a good start, but nowhere near loud enough. Stick them harder Kelly, and get them squealing properly. Then you’ll know you’re getting it right.

  19. Perhaps an annual review of (select) transactions and some high profile asset seizures by our government would be enough to warn off foreign buyers without the need for heavily policing transactions.

    The proceeds from their sale could then be used to help mend the budget 😉

    • There is no “heavy policing” required. No difficult legislative change required. No “stiff new penalties”. The laws are already in place.

      All that is required is one simple administrative step.

      • All that is required is one simple administrative step. Indeed, although I would add stewardship to that mix as I think the problem is much bigger than many think. There will be some political fallout.

  20. What a bunch of c*ckheads! This kind of self-preserving BS is typical of the Australian FIRE industry. It’s not like Kelly’d be asking them to do MORE… they should already be honoring their ‘professional’ codes of practice by exercising good judgment and duty of care.

    Their stuck pig squealing just makes them look even more complicit and willing to turn the other way.

  21. This kind of hyperbolic reactionary response from the FIRE brigade of specufestering leaches on the pimple on the ass of society is spectacularly Pavlovian.

    If you could give an enema to a whole industry this one would be it.

    Personally im going to email Kelly O’Dwyer to congratulate and encourage her efforts.

    • AM,

      While you are politely conversing with Kelly can you ask her these three questions?

      How many existing Australian dwellings are owned by foreign nationals?
      How many existing dwellings were bought by foreign nationals in the last 12 months?
      Your inquiry has been going for 6 months Kelly. Why haven’t you started to collect the data?

  22. This would add a useful stick to improve the situation but in the same way drug enforcement policy keeps trying to solve the problem at the supply end we are missing the real problem and solution.
    If there weren’t massive rents to be had in housing foreign buyers wouldn’t be interested.
    Take away the carrots and the squeamishness of the stick weilding regulator becomes a small problem.
    Introduce a LVT to absorb the capital gains and rent which is fueling demand and the few foreign investors who stay in the market won’t be much concern. And of course remove negative gearing concessions and stamp duty.
    [Why is there no emoticon for flogging a dead horse?]

  23. Forrest GumpMEMBER

    A supermarket employee sells cigarettes to an underage youth and cops a fine and loses his/her job.

    A barman/woman sells alcohol to a drunken person and cops a $2000 fine and probably loses his/her job. (Responsible Service of Alcohol)

    The onus is on the agent selling the goods, not the owner of the goods, nor to a point- the purchaser.

    The trading of shares requires the buyer to have an Australian tax file number as evidence of residency.

    Opening a bank account requires proof of identity in the form of the 100 point rule. If you can’t prove your identity, you can’t have an Aussie bank account. And furthermore, if you don’t provide your TFN, your interest is charged at the maximum rate.

    We already have all these systems in place for every other part of our trading and financial system.

    Why should real estate be any different?