Looks like I am not the only one who see this as an issue - see article in The Age today....If you have no data how in the hell are you regulating compliance!!!!
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No data: foreign buyer property puzzle CHRIS ZAPPONE April 21, 2010 - 9:43AM Comments 11
The federal government has no clear idea how many sales of existing homes have been made to families of foreign students since the relaxation of the foreign investment rules at the beginning of 2009.
A government analyst confirmed that no data had been kept on those purchases following the rule change allowing temporary residents to buy existing homes for their place of residence without prior approval.
Australian home prices have jumped nearly 13 per cent in the year to February and an already tight housing market has been stretched further by historically low interest rates and a growing population. It is not known what impact purchases by temporary residents have had on the housing market.
The rule changes, aimed at easing paperwork at the Foreign Investment Review Board, also lifted the $300,000 cap for foreign students, throwing open a new segment of the local market to pressure from foreign buyers.
Assistant Treasurer Senator Nick Sherry, whose office oversees the FIRB, denied any noticeable impact from the change.
''In recent years, FIRB approvals for temporary residents to buy established houses as a percentage of the total number of transfers of established housing in all the state and territory capitals have been between 1.5 per cent and 2 per cent, there is no evidence that this has changed,'' a spokesperson for the assistant treasurer said.
''The FIRB has an active compliance program in place to ensure real estate acquisitions comply with foreign investment rules," he said.
Mixed signals
The lack of data on existing home sales to temporary residents comes amid mixed signals for the housing market overall. Auction clearance rates, measured by Australian Property Monitors, hit 77 per cent in Melbourne and 68 per cent in Sydney this weekend, showing demand remains strong.
Home loans taken out by local buyers, however, slumped for a fifth consecutive month in February, leading observers to question the growing gap between home prices, which traditionally track the pace of home loans.
Victoria's State Revenue Office records buyers' addresses in the statutory declarations for title transfers. However, a spokeswoman for the SRO said the data was not compiled, nor were there checks in place on the nationality of buyers.
The 200,000 foreign students enrolled in Australian education institutions in any given year, along with the 50,000-60,000 people in Australia on business visas could be eligible to buy property that wouldn't be monitored by the FIRB, according to Nevett Ford immigration lawyer David Stratton.
Mr Stratton said the lack of data on foreign buyers created a bit of an unknown factor in the local housing market. But the final impact was unclear.
''It's too early to say whether it's a problem, because the other point we don't know is how many people (buying existing property) are permanent residents or citizens,'' he said.
''At this stage, it's too early to say whether there's a problem or not but it obviously needs to be monitored very carefully.''
''We see a lot of Asian buyers at auctions. Many of those may be permanent residents or citizens.''
Mr Stratton said Asian buyers had been purchasing property in Australia for many years, but the rule change coincided with China's economic expansion.
He said it was not clear if foreign demand for Australian property was being felt evenly across the market, with interest in Melbourne concentrated on inner suburbs, while demand in other parts of the state had not been reported.
In comments on Meet The Press earlier this month, minister for housing Tanya Plibesek said new property sold to foreign owners was within the historical range of 1.6 per cent to 1.7 per cent.
However, 1.6 per cent to 1.7 per cent figure comprises only purchases for which applications are still made, such as applications by non-resident foreign investors to develop vacant land or temporary residents wanting to invest in higher density developments.
