Overseas investment: Real estate buyers need an even playing field

Douglas Driscoll

Australia is a desirable country to overseas investors mainly because of our stable economy, favourable weather conditions and proximity to Asia, and this year, I believe international developers will truly arrive in a big way.

I am of the firm belief that Australian residents should have, at the very least, equal opportunity when buying real estate in their own country.

This is not a xenophobic standpoint; I merely want to see the same rules be applied to anyone buying in Australia irrespective of where they are from.

I have a few solutions for a fair foreign investment policy that gives Australians equal opportunities and this all starts with the introduction of a levy.

Last year the government introduced a tax for overseas investors but, in my opinion, they should have to pay even more.

A handful of high-profile and high-net cases were intentionally made public last year to oust some illegal transactions and spook off any other unscrupulous investors, but I think these homes were just the tip of the iceberg.

My question is, what about the rest of the iceberg? There is a strong suggestion that this is taking place in the upper echelon of the market and we need to take a harder look into where the money is coming from, which starts with money-laundering checks.

‘It’s my view that we should re-establish the rule of developers having to sell a portion of properties to Australian residents, and place a limit on how many properties overseas investors can buy.’

I believe that financing is no longer fair for the local investor. Here, under macroprudential guidelines, we have Australian residents paying a 20 per cent deposit whereas international buyers can circumnavigate the system.

All buyers should be on a level playing field and there shouldn’t be any loopholes.

There have been reports that up to a third of off-the-plan developments in Sydney and Melbourne were sold to overseas investors last year.

It’s my view that we should re-establish the rule of developers having to sell a portion of properties to Australian residents, and place a limit on how many properties overseas investors can buy.

It’s become increasingly common for foreign investors to buy and develop or redevelop, then sell property on Australian soil off-shore or to international investors with Australian residents sometimes not even getting a look in.

We need to look at the vulnerability of our market – does selling too much to overseas investors make us become vulnerable to factors outside of our control?

All that glitters isn’t gold.