A parliamentary committee will recommend tougher screening for foreign investment in residential real estate by calling for a more robust review regime and the creation of a national register to monitor transaction data, the MP leading the parliamentary inquiry said.
“We are going to put recommendations to the government, including around FIRB (Foreign Investment Review Board) processes,” Liberal MP Kelly O'Dwyer told DataRoom on the sidelines of the Citi Investment Conference in Sydney today. “We think those processes have not been robust enough in terms of auditing and compliance.”
Ms O’Dwyer is leading a parliamentary inquiry into foreign investment in residential real estate, which is due to report next month. The inquiry has been examining whether current policy is boosting the supply of new housing, as it intends to.
Foreign buyers are only allowed to purchase new housing in Australia, and must go through Foreign Investment Review Board processes to buy existing dwellings under certain conditions.
Ms O’Dwyer said evidence showed there were “non-compliance” cases in the process, but “it is very difficult to say what the level of non-compliance is by its very nature”.
That is why the committee will recommend creating a national register “where you actually need to verify information that goes on the register,” Ms O’Dwyer said. The register could also provide better information on whether those transferred titles actually match up with the cases screened by the FIRB, she added.
Foreign buyers, particularly in Sydney and Melbourne, are causing community concerns that local buyers are priced out of the market.
A property survey released by the National Australia Bank today shows that foreign buyers are snapping up one out of every six new homes – a number which is set to increase.)
(Reporting by maggie.lu@businessspectator.com.au)