I came across this article on Australian Property Investor. I thought this was a good read and gives a bit of an insight into the foreign investment debate.
Since March 31, the government has been unable to provide data on the number of foreign investments made in residential housing due to temporary visa changes, according to Shadow Minister for Families, Housing and Human Services Kevin Andrews.
Foreign investment rules were relaxed in the face of the economic downturn in December 2008, to hold up the property industry in case of a collapse.
As a result, now temporary visa holders are exempt from notifying the Foreign Investment Review Board (FIRB) of their property purchases.
It also means that instead of developers being permitted to only sell 50 per cent of developments to foreign investors once tenanted, they can now sell 100 per cent.
In his demand to the Federal Government to compile and monitor data on foreign investment of residential property, Andrews said that this rule change has contributed to housing affordability problems in Australia.
But The Urban Taskforce chief executive Aaron Gadiel believes foreign purchasers have contributed positively to the nation, in boosting housing supply.
"By allowing foreign investors to purchase newly-built housing, more apartment development is made possible, which in turn means more homes available to renters," he said.
"This will help mitigate the strong upward pressure on residential rents arising from our chronic undersupply of housing."
Gadiel said that prior to the recent policy change, developers who rented out newly built homes for six or 12 months were barred from subsequently selling the property to a foreign investor.
"This forced some developers to leave properties vacant, rather than lose the opportunities to sell to investors without permanent residency."
"The new rules enable developers to rent out a home for up to 12 months, without losing the right to sell to foreign investors."
This information was gathered from:
http://www.apimagazine.com.au/api-online/news/2010/04/foreign-property-investment-debate-heats-up
Thinking of buying or selling in Nedlands? Call me anytime.
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