A fifth of all new built apartments in Australia are now being sold to investors from overseas, it has been claimed in a report released this week by the National Australia Bank (NAB).
It said that in the three months to the end of September this year, 20 per cent of all new apartments were being snapped up by the wealthy overseas market, while approximately 15 per cent of new houses were being bought by the same demographic.
Assistant Treasurer Kelly O’Dwyer said legislation before parliament would close loopholes and strengthen the foreign investment framework to make sure that action in the market such as this is all above board and completely legal.
“There will be new penalties for third parties who have breached our foreign investment framework ... (including) third parties who knowingly encourage non-resident foreign investors to purchase established property,” she said.
The large swell in the number of people who are buying new homes from overseas is because of the crackdown from the Australian government in recent times. The law states that people from other nations can buy new homes in the nation, but they are not allowed to buy existing properties unless they are residents.
A cracking down on illegal practices, wherein the government has forced people who illegally bought properties to sell them, will have seen the volume of people turning towards new homes swelling.
Australia still sees higher proportions of foreign buyers compared to other nations, largely because the dollar remains relatively weak. It means people can get more for their money. In other markets that are seen as more established, around 11 per cent of apartments and nine per cent of houses go to foreign buyers.
