E&OE..................................................................

Issues: Foreign Investors in the housing market

CHRIS SMITH:

The Shadow Parliamentary Secretary for Housing is Senator Gary Humphries, hes on the line.  Gary gday.

GARY HUMPHRIES:

Good afternoon Chris how are you?

CHRIS SMITH:

Good, thanks for that.  Now just for those who were expecting Kevin Andrews hes been flying today and we cant get hold of him.  This is called Land Backing Im describing right?

GARY HUMPHRIES:

Yes it is basically.  Its where people can see a killing can be made with an investment, theres a loophole somewhere that allows them to purchase property in another country, and they swoop down and they do it. As long as the land keeps its value in a sense they dont really care what goes on on that land.

CHRIS SMITH:

OK, what under these new laws are they supposed to do, how are they getting away with it?

GARY HUMPHRIES:

Well look the previous laws said that if you were a foreigner, you could only buy new properties that is properties that were being built and then you had to rent them out so that somebody was getting the benefit of your investment.  You could only buy a property to live in if you lived in the country yourself.  OK fair enough.  The Federal Governments relaxed those laws recently and now said that people with temporary visas can also purchase properties in this country. 

CHRIS SMITH:

That would include students?

GARY HUMPHRIES:

It would include students, it would include with different interests who might live half the year in China or half the year in Australia, lots of different sorts of people would have access to temporary visas.  And because its now an exemption from the rules the Foreign Investment Review Board used to review, we dont know, Australians dont know just how many of these purchases are taking place.

CHRIS SMITH:

Or how many foreign investors have huge portfolios of properties.

GARY HUMPHRIES:

Indeed, indeed.  And Kevin Andrews has been following this very closely, hes had the courts in some parts of Australia of several members of the one family all with temporary visas purchasing individual properties in their own names, or students who are here for a relatively short time making a purchase, and theres really no monitoring of this situation going on.  We dont know how many of these purchases are taking place and we can only assume that its basically a loophole of the law, people are taking advantage of it, and it may be having an effect on the affordability of housing for Australian residents.

CHRIS SMITH:

It has to.  Now the hotspots Im seeing, from all the articles written on this, include the Gold Coast, Sydneys North Shore, inner-city suburbs of Melbourne and also Brisbane.  Is that about right?

GARY HUMPHRIES:

Yes, Im told Perth is a bit of a problem as well.

CHRIS SMITH:

What about Nick Sherry the Assistant Treasurer, he says hes going to crack down on it, hows he going to do that without the appropriate regulations under the foreign investment laws?

GARY HUMPHRIES:

Well what Nick Sherrys going to do is get people prosecuted if he can find anybody thats breaking the rules.  The trouble is, Chris, that hes actually bent the rules himself.  Hes widened the gap in the rules to allow people to come in there and purchase homes when they are not Permanent Residents of Australia.

CHRIS SMITH:

What a mess

GARY HUMPHRIES:

The DPP has no role to play in those cases because his own Governments changes effectively allowed them to make those laws quite legitimately.

CHRIS SMITH:

OK you keep following this, Ive run out of time now but we might keep following this over the next few weeks and see if the Governments getting off their bum and doing something about it.

GARY HUMPHRIES:

All right Chris.

(ends)