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The federal government needs to clamp down on overseas sellers of second-hand Australian property to foreigners.
It is estimated that more than 90 per cent of China-based companies selling Australian property are unlicensed to do so and consequently do not understand the rules applicable to this market sector.
Overseas sellers of Australian property are the primary cause of the second-hand property market’s problem. The federal government has chosen to focus on foreign purchasers breaking foreign investment rules, but has completely ignored the sellers.
In many cases, overseas property agencies selling Australian property have never been to the country, are not licensed and do not understand Australian rules controlling second-hand property transactions. Hundreds of properties are being sold illegally and this needs to stop.
Treasurer Joe Hockey recently announced that over 195 home purchases were being investigated for allegedly breaching Australia’s foreign investment rules. Up to 60 investigators have been deployed to check the compliance of these events with Australia’s foreign investment regulations.
We support the government tightening its investment rules around second-hand property purchases. However, its primary focus should be on people illegally selling property. Proper regulation in any market is critical to ensure unlawful behaviour is eradicated.
Ausin has spent thousands of dollars in each state acquiring real estate and financial services licences to enable company representatives to sell and offer informed financial advice about Australian property to the Chinese market. Many foreign purchasers are being unfairly tarnished with the same brush as those not following Australian law, which is most unfortunate.
The government needs to adopt a holistic approach to this problem, which includes the implementation of legislative changes to ensure all overseas – as well as local – agents selling Australian property hold the appropriate licences.
Many unsuspecting foreign buyers of Australian property are getting caught up in a legal tangle that could be eliminated if the agents selling the property were appropriately regulated.
Investors based in China and new immigrants from China bought nearly $9 billion worth of Australian residential property last financial year, according to Credit Suisse. This is a 60 per cent increase on the previous year.
Chinese demand for Australian property is here to stay. We need to ensure the right messages are being sent to foreigners regarding investment in Australia. The federal government needs to continue to police unscrupulous buying and selling activities and allocate more resources to this area. Importantly, the government needs to ensure those complying with the rules are not penalised.
The construction industry in Australia is this country’s largest economic stimulator and creator of jobs. Significantly, this reality is mainly fuelled by foreign investment. We need to welcome and support foreign investment and take steps to further strengthen this position to ensure Australia maximises the economic gains from it.
ABOUT THE AUTHOR
Joseph Zaja
Joseph Zaja is the managing director of the Ausin Group. Ausin is one of Australia’s largest privately owned companies providing property, wealth management, lending, property management and immigration advice to Australian and overseas markets.
With over 12 years real estate and finance experience, Joseph has held positions such as financial advisor at MLC Private Client Services and a long-term property and development advisory role to a prominent family-run investment company. He is a member of the REINSW and is licensee of Ausin Group (Australia).
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