Overseas investment: Real estate buyers need an even playing field

Douglas Driscoll

I would like to start by saying I actually welcome foreign investment in Australia, but believe measures should be taken to ensure Australians are not at a disadvantage.

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.

Douglas Driscoll is the chief executive of Starr Partners.