Australians are concerned that foreign investors, particularly Chinese buyers, are primarily responsible for pushing up housing prices across the country.
In fact recent surveys show that a large number of Australians believe foreign investors should not be allowed to buy real estate here at all. The truth about overseas investment in real estate, both residential and commercial, however, reveals several positive notions that many Australians may not have considered.
Does foreign investment help the economy?
According to a recent report Benefits of Foreign Investment in Real Estate commissioned by the Property Council of Australia, foreign investment in all types of real estate is a vital part of the economy. It keeps people in jobs, strengthens growth and contributes significantly to the nations income.
Overseas buyers often get new projects up and running that would otherwise lag behind or be shelved entirely. Foreign investors currently fund around $20 billion in commercial real estate for instance.
What are the restrictions for foreign investment in Australia?
Australia’s foreign investment laws are stringent, second only to Switzerland, which means that non-residents can only buy newly built dwellings, and that’s after gaining approval from the Foreign Investment Review Board. They cannot buy established homes. This policy was designed to stimulate the construction of new housing and support the building industry and its supply chain.
The report claims that first home buyers are generally not competing with overseas investors as over 80% of first home buyers purchase an existing dwelling.
Affordability for first home buyers are still a major concern.
Providing affordable housing to first home buyers and to every Australian is still an ongoing concern for our nation. It’s essential to look at how we can improve on current plans and policies, and this includes foreign investment laws. However, this latest report concludes that much of the negativity surrounding foreign investors in Australia is completely unfounded.
