Wednesday, April 28, 2010

Backflip: Change to Foreign Ownership Laws for Australian Homes

The Federal Government made a significant policy back-flip on the weekend following the uproar developing in the media and reported here, regarding the relaxation of laws for foreign investment in Australian real estate. The situation was changed to allow overseas TR holders buy property without the need for the Foreign Investment Review Board approving the purchase. Since the government made no efforts to record how many houses have since been sold following this policy, the effect cannot be measured but house prices have gone up around $75,000 in some areas in the meantime. 

Under the new rule, temporary residents would be screened by Foreign Investment Review Board to buy a property and must sell their property when they leave Australia. If they purchase vacant land, they must build on that vacant land within 24 months or sell it.

The rules are backed by stiff new penalties including compulsory sell orders, as well as expanded monitoring and a crackdown on real estate agents who help foreigners flout the rules. 
The Prime Minister said "We want to make sure that Australian working families are not being priced out of their own family homes. That is why we have acted in the way in which we have done. We want to make sure that foreign speculators are not going to force up prices for Australians seeking to buy their own home, buy their first home and we think this is the right course of action."
Makes one wonder why the law was changed in the first place, two years ago. 

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