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A lack of regulation of Asian developers building apartments in Australia could see more cheap housing built than the country actually needs.
This is the concern of David Devine, founder of Metro Property Group, which was aired on Channel Nine’s Financial Review Sunday at the weekend and covered in the Fairfax press.
Mr Devine expressed concerns that unregulated developers from Asia could lead to an oversupply of cheaper housing, namely apartments, in pockets on the east coast.
He cited evidence that overseas developers had already targeted areas of Sydney and Melbourne and, he believed, “they will probably come to Brisbane”.
“Developers who have survived the financial crisis, who understand what is required to be a developer, they are the ones who should be developing,” Mr Devine told Financial Review Sunday.
“New people coming in oversupply the market because they don’t understand what is going on.”
Mr Devine urged the Foreign Investment Review Board to take a closer look at the activities of overseas developers – primarily from China, Singapore, Hong Kong and Malaysia – and regulate where necessary.
As noted in the Fairfax article, there is a perception that foreign developers are prepared to heavily outbid local developers for blocks of available land and deliver a cheaper end product that may not be to the standard of local constructors.
However, it should be noted that it is not illegal for foreign firms to compete with local developers for projects.
The federal government is presently investigating foreign ownership and investment in the local market, with the results of the inquiry due to be released some time in October.
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