Clampdown on foreigners buying property

The federal government has admitted its new crackdown on foreign investors is an
acknowledgment that Australian first-home buyers are being priced out of the market.
The tightening of foreign investment rules require temporary residents to be
screened and get permission from the Foreign Investment Review Board to buy a
property, sell their property when they leave Australia and build on vacant land
within 24 months or sell.
There have been anecdotal claims of foreign investors - especially wealthy Chinese
families - `stockpiling' Australian houses and leaving them idle, and of outbidding
young people at auctions.
Chinese buyers have been involved in near-record high purchases including an
apartment in East Melbourne and a house in Sydney.
Treasury is investigating 50 suspicious cases in Melbourne with those caught facing
fines and jail.
The laws will be backed by new punitive measures including: making it easier to fine
vendors and real estate and confiscate capital gains; expanded data-matching to
improve monitoring and increased enforcement; and a dob-in-style 1800 free hotline
for people with suspicions.
The move, announced on Friday, is a reversal of the relaxation of foreign ownership
rules 18 months ago.
Prime Minister Kevin Rudd said the changes would make it easier for Australians to
get into the real estate market.
"We want to make sure that Australian working families are not being priced out of
their own family homes," he told reporters in Canberra on Saturday.
"We want to make sure that foreign investors are not going to force up prices for
Australians seeking to buy their own home, buy their first home, and we think that's
the right course of action."
Federal Assistant Treasurer Nick Sherry said that while he was concerned about
`stockpiling', he did not believe it had had a major impact on house prices.
He said the tougher rules were brought in because the compliance regime was too weak
and Australia had a strong economy that was attractive to foreign investors.
"I don't accept that overseas purchases has, in itself, been a major factor. It may
have been a contributing factor," he told reporters in Melbourne on Saturday.
"There is a considerable range of other factors that impact on housing prices: land
shortages and the underlying strength of the Australian economy."
Shadow treasurer Joe Hockey said the government was copying Howard government policy
by requiring temporary residents to sell their houses when they leave the country.
"In part, the government is just returning to the old rule set up under the Howard
government," he said.