It’s no secret that the property market in Australia is booming when it comes to foreign investors. Sydney and Melbourne in particular are under the spotlight as Chinese investors snap up properties for their investment portfolio. This property boom has come at a cost with prices in the two major cities expected to continue to climb as properties become more in demand and less affordable.
It was reported the National Australia Bank that at the beginning of 2015, one in five homes was sold to a foreign investor, many of which are Chinese. The appeal of Australian property to Chinese investors is for many reasons including:
Due to the current regulations stipulated that foreign investors can only purchase brand new properties which is why many development groups concentrate on selling their properties off the plan to foreign investors who are wanting to reside in Australia. If an investor holds a Significant Investor Visa then they are allowed to purchase existing properties.
However, some foreign investors are not playing by the rules when it comes to what property they can and can’t purchase and the Department of Immigration has had enough. The government has recognised that some of the foreign investors are not entirely to blame and some of the investigated incidents of unlawful purchasing may have been instigated by the real estate agent. To set a pattern to ensure that the real estate agent is more diligent with checks, it has been announced that as of the 1st of December a law will be introduced which will enable the department to charge, fine and possibly order jail time for the agent as well as the investor.
Treasurer Joe Hockey announced in a press conference early last month that the Foreign Investment Review Board was investigating nearly 200 Australian homes which have been purchased by foreign investors. This crack-down on foreign investors will ensure that investors are playing by the rules when it comes to buying houses. If you are interested in purchasing a home to live in or perhaps invest in, then give us a call and speak to one of our qualified migration agents.