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Australia’s parliament will investigate foreign investment laws amid fears that Chinese investors may be pricing local homebuyers out of the market.
The Standing Committee on Economics will consider whether the current laws are having a “truly distorting impact” on house prices, according to committee chair Kelly O’Dwyer.
Ms O’Dwyer told the Daily Telegraph that she was in favour of foreign investment that increased the number of homes, particularly those suitable for first home buyers.
“That is the objective of current policy, but we need to examine what is happening on the ground,” she said.
“The great Australian dream to own your own home is hard enough to achieve on two incomes, with years of saving and a large mortgage. We need to make sure that we are not making it more difficult – which is why we are going to examine the facts in our inquiry.”
Ms O’Dwyer told the ABC that the committee would also focus on occupancy.
"I think what there's concern about is whether or not apartments are being occupied,” she said.
"So whether or not it's fulfilling the original mandate to provide additional dwellings that can be purchased, in the end, by other Australian investors and homeowners."
Ms O’Dwyer also noted recent comments by Reserve Bank of Australia governor Glenn Stevens, in which he said foreign investment in housing “has its effect on asset values”.
"We want to know though whether or not the current laws and the current framework is being properly adhered to and whether it is a truly distorting impact," she told the ABC.
The terms of the inquiry have not yet been revealed. A parliamentary spokesperson told Real Estate Business' sister publication, The Adviser, that an official announcement was likely to be made next week.
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