John Findley, the general manager of Shanghai Resources, which is a prominent migration expert working with wealthy Chinese investors, has shed light of the extent of “questionable” foreign residential real estate investment in Australian, all the while supporting the Abbott Government’s planned reforms to strengthen Australia’s surveillance/enforcement regime. From The Australian:
Mr Findley said much of the questionable investment was coming from offshore investors who used friends or relatives to buy here. He had heard suggestions in legal circles of potentially billions of dollars in such sales in Sydney alone.
“I suspect they (police) know what’s going on but each instance is too small to track,’’ he said.
Mr Findley said he was encouraged [by] the proposed changes…
He said plans to apply fines to agents and lawyers who facilitated illegal transactions would probably “catch a fair bit of it” if enforcement efforts were increased.
The fact that nobody knows the true extent of foreign investment in Australian residential real estate, and that FIRB has failed to prosecute a single illegal purchase since 2006 and issued no divestment orders since 2007, is bona fide evidence that Australia’s foreign investment regime is broken.
Adequately resourcing FIRB by implementing a modest levy on foreign transactions, along with developing proper data collection systems and processes relating to foreign purchases, and extending the penalties regime to third parties that facilitate illegal sales, are intelligent reforms from the Coalition that are long overdue.
These new reforms were brought before Cabinet last week. Let’s hope they pass the House shortly and do not get held-up in the Senate.
