Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

Joel Robinson

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

&nbsp;

Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.

The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.

[smartcode_project:default project_id=144441 project_image_fid=370975]

Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.

“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.

The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.

The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.

“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”

The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.

[smartcode_project_cta:default project_id=144441]

Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

Foreign Buyers

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Foreign buyers using trust structures to hide purchases are breaking the law, according to the Parliamentary Secretary for the Treasurer Kelly O'Dwyer.
"If you're a foreign investor, you can't purchase existing property and if you're trying to set up a structure to help make the purchase, you're circumventing the framework and that's against the law," she told The Australian Financial Review.
O'Dwyer's comments came in response to estate agent Robert Simeon, a regular Property Observer columnist, <a href="/expert-insights/treasurer-joe-s-villa-del-nightmare-robert-simeon">whose column detailed the ways</a> in which he thought foreign buyers were stepping around foreign investment rules to purchase local property.
O'Dwyer chaired a House of Representatives inquiry into foreign purchases of residential property which has prompted the government's Options Paper on foreign investment in housing, which will take feedback until 20 March.
"The law is very clear around established versus new property," O'Dwyer said.
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jchancellor-FAypfDUnLy

Trustee arrangements will fail FIRB test if caught: Kelly O'Dwyer 

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GUEST OBSERVATION
Strengthening compliance and enforcement around foreign investment in Australia was a good thing, however a fee structure that made Australia non-competitive was not.
When foreign investors are looking at Australia, they are also likely to be looking at New Zealand, where there is no stamp duty and no capital gains, for instance.
The UK, USA and Canada may also be considered as investment markets, and no residential property application fees exist.
So the proposed fee for foreign investment in Australian property is higher than that in other countries such as Switzerland and Austria; but Austria and Switzerland are not realistically on the same real estate page.
Sure, the fee will generate dollars; but don’t turn the foreign investors away for any short-term financial gain.
Michael Davoren is managing director of <a href="https://www.remax.com.au/about-us" target="_blank">RE/MAX Australia and RE/MAX New Zealand</a>.
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mdavoren-BoeuVwusdi

FIRB fee could turn away foreign investors: RE/MAX's Michael Davoren

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Well, the property is actually named Villa del Mare and I don’t really see the current owners having too much trouble as they correct their divestiture order.
The nightmare is actually faced by treasurer Joe Hockey given he now has to investigate millions and millions of property transactions – which we all know by now that such a task is impossible. First of all they don’t have the manpower nor the most important criteria – the data.
Let’s be honest here, the Abbott government decided to announce their ‘ferocious’ crackdown on foreign buyers simply to distract attention from its decision to back-flip on the Medicare co-payments, and what a smoke screen this proved to be.
Naturally, this was all tied into Foreign Investment Review Board (FIRB) statistics where it was revealed to The House of Representatives Standing Committee on Economics that in the first nine months of 2014 foreign investment had surged 44%. One would seriously have to ask the question is there a hotter real estate market in the world at the moment than Sydney?
For the federal government to forensically investigate all the property transactions and we are talking about millions and millions of transactions the answer is simple – no chance. In 2013-14 alone NSW recorded 860,000 property transactions.
So front and centre we have a $39 million Point Piper mansion that must now find a new buyer within the next 90 days. Well didn’t the media fall for that bait hook, line and sinker. I’m happy to bet that this property will not be offered for sale, rather the present owners will simply transfer the property into another name. At the heart of the problem is that Joe Hockey is totally wrong when he claims that: “Under the Foreign Acquisitions and Takeover Act 1975, foreign investors must notify the treasurer through the Foreign Investment Review Board before purchasing residential real estate.”
Sorry to tell you Joe, but foreign buyers have found much better ways to acquire residential real estate and yes, thanks to your crackdown, you’re about to find out just how. Although I am sure that there will be many cases of foreign buyers who have simply disregarded FIRB regulations and purchased properties without application.
The much preferred method that foreign buyers have pursued is to simply transfer funds to their newly appointed “trustee” who has Australian residency, and they then legally purchase a property. When it suits the foreign buyer they apply for Australian residency and once this is granted they then apply the <a href="https://www.austlii.edu.au/au/legis/nsw/consol_act/da199793/s18" target="_blank" title="Duties Act 1997 – Sect 18">Duties Act 1997 – Sect 18</a> which applies to “no double duty”. Given that they can prove that they actually provided all the funds to acquire the property to their appointed “trustee” they then pay a duty of $50 to have the property transferred into their name. So you see there is absolutely no need to advise the FIRB given this is totally legal in NSW – so Joe Hockey should be looking at all the legally available loopholes first.
At last count the treasurer’s FIRB consisted of just 10 staff, so given the recent announcements we may assume that this department has been increased tenfold so that they can energetically confront these serious concerns. In all probability this too will be placed in the too hard Canberra basket, although I believe everyone would agree that this is a serious problem that requires urgent attention.
The reality of the matter is that the FIRB is, as I have said on many occasions now, “hopeless’’ given they don’t even know where to start to take control of this crisis. For most obvious reasons the states and territories won’t exactly be energetically offering assistance given they are only concerned about protecting their “rivers of gold”, otherwise known as stamp duty.
The only way that the federal government can get to the bottom of these foreign acquisitions is to somehow get hold of the stamp duty records – which won’t happen anytime soon.
Like a bull at a gate Joe Hockey has opened up his very own house of worms without even realising the sheer magnitude of the job at hand. From past experience we all know only too well what happens next, don’t we.
Nothing happening here folks, move along, we have everything under control. Next question?
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robertsimeon-hRNTwJyXkQ

Treasurer Joe’s Villa del Nightmare: Robert Simeon

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While accountants PwC brush up on Point Piper foreign buyer laws, the Federal Treasurer Joe Hockey says further suspicious house purchases across Australia were to be investigated by the reinvigorated Foreign Investment Review Board (FIRB).
It follows the government decision to <a href="/news/point-pipers-villa-del-mare-back-for-sale-as-australian-treasurer-thwarts-chinese-billionaire">force the sale of the $39 million Point Piper trophy home, Villa de Mare</a> (pictured above).
"It's amazing how many phone calls we got this morning," a chuffed Joe Hockey said yesterday, ignoring the backlash from some business interests which sees far wider ramifications for Chinese trade relations.
"We're not going on a witch hunt," the Treasurer added.
"And we definitely don't want an atmosphere of xenophobia or anything.
"We actually just want to be in a position where we maintain, preserve and enhance the integrity of the foreign investment regime."
The Sydney-based, but beneficially China-owned, company Golden Fast Foods has 90 days to offload 63-67 Wolseley Road, Point Piper after being found to have breached foreign investment rules.
The company was deemed ultimately beneficially controlled by Chinese developer Evergrande Real Estate Group and China's 15th richest man, according to Forbes, Xu Jiayin.
Golden Fast Foods is directed by Sydney-based accountant and former PwC partner Stanley Brogan and two Chinese associates, including the Evergrande director Huang Xiangui, <a href="/news/guangzhou-evergrandes-chinese-billionaire-owner-xu-jiayin-tipped-as-villa-del-mare-point-piper-buyer">as Property Observer noted on its November 2014 settlement</a>.
The federal goverrnment forced sale comes as Xu shortly attends, as a delegate, China's annual parliamentary meeting, the main public event on China's political calendar.
Searches on Baidu, a Chinese version of Google, brought up the matter of Xu's Point Piper mansion, though with an error page saying "the news content was unable to be provided".
Earlier critical coments by internet users had appeared on the Weibo website, according to The Australian's China correspondent, Scott Murdoch.
Hockey would give no details of the other houses under suspicion but advised they were across price ranges.
The Australian Financial Review reported Joe Hockey had indicated he had no sympathy for the owner of the home and the FIRB investigation had been requested personally.
The sale of Villa del Mare is FIRB's first forced divestment since 2006 coincided with the unveiling of a federal government consultation paper.
The proposed measures are designed to restore confidence in a foreign investment review system that had not prosecuted anyone for breaching the rules in nine years.
"We welcome foreign investment. It is hugely important," Hockey said.
But Sydney's top end of town fears the fallout will be much wider than a prestige property upheaval, arguing it was easy for the Chinese government to tacitly advise banks that there were not to be acquisitions of Australian businesses for a while.
Geoff Raby, Australia's former ambassador to Beijing, recently noted Chinese interest in Australian farms and processing assets was surging.
Since 1 March, foreign investors require approval from the FIRB to buy agricultural land worth $15 million, down from the previous threshold of $252 million.
Raby, who was the Chinese ambassador from 2007-2011 and has since founded Beijing-based advisory Geoff Raby &amp; Associates, said the changes had been noticed in China.
"The Chinese certainly wonder what our intention is and ask: Is this directed against China? Is this a Chinese concern we have? Any change in the [regulatory] regime will create uncertainty," he told The Australian Financial Review following his presentation to the ABARES Outlook 2015 conference in Canberra.
The Australian reported PwC had no role during the purchase of the Point Piper property as PwC merely helped Mr Xu establish the shelf company that later bought the property. 
The firm was also called in for advice after questions arose about why approval for the transaction had not been sought by the FIRB, The Australian advised.
 
 
 
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Foreign buyer crackdown is no witch hunt says Joe Hockey after Point Piper FIRB divestiture order

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"Have you ever seen a $1 million in cash," a Sydney estate agent asked the quite surprised 2GB Money News broadcaster Ross Greenwood on his show last night.
"I can't think that I have," <a href="https://www.2gb.com/article/money-news-ross-greenwood-wednesday-march-4" target="_blank">was Greenwood's reply</a>.
"It's intoxicating, you can't keep your eye off it" the undisclosed agent advised.
The claim coincided with the unveiling of a federal government FIRB property buying consultation paper, with proposed measures designed to restore confidence in a foreign investment review system that had not prosecuted anyone for breaching the rules since 2006.
The agent said he came from an undisclosed suburb heavily populated by people of Chinese origin and also a destination for Chinese investors. Property Observer gathers it may be riverfront inner west Sydney.
"They come in weekly with literally suitcases with a $1 million, $2 million in cash," the agent told Greenwood, who had the agent's identity checked, but not revealed on air.
"The one thing they say is we don't need a bank, we can settle in two weeks."
Asked whether they were buying new or established homes the agent said: "Anything."
"It is happy days for me as I am an agent, but for my kids, your kids and the listener's kids, they have no hope."
Asked how they are getting around the rules, the agent said they respond 'you don't have to worry about that.'
One buyer told him the cash came from camper van trailer factory back in China, when his questioning met his curiosity and obligations regarding excessive cash transactions.
Ross Greenwood wondered how the money gets through Australian customs.
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Chinese investors reportedly with $1 million cash in suitcases to buy Sydney property

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The federal government's foreign investment crackdown was premised on the doubtful outcome of making houses more affordable for young Australian first home buyers.
Treasurer Joe Hockey's accompanying dramatic announcement regarding <a href="/news/point-pipers-villa-del-mare-back-for-sale-as-australian-treasurer-thwarts-chinese-billionaire">a $39 million Point Piper divestiture order</a> after it's illegal purchase won't however achieve that outcome.
But it will make trophy homes on pricey harbourside peninsulas much more affordable. Even Hockey's own suburb, Hunters Hill will feel the ripples after Villa del Mare's buyer was caught illegally buying it through a company, registered in Australia, which had warranted it did not need FIRB approval. We'll keep the $2.67 million purchasing stamp duty!
The many high ranking Chinese buyers that seek to cherry pick our best trophy homes were already ill at ease about the exposure their private residential acquisitions were attracting in the free press, but now they will undoubtedly back off in anxiety to suburbs or countries friendlier to their discrete purchasing desire.
Certainly nothing on the street that has attracted bus tours from sightseeing Chinese tourists when they visit Sydney. No more just cuddly koalas and the Opera House – <a href="/expert-insights/investing/point-piper-on-the-chinese-tourist-route-for-insight-into-the-privileged-lives-of-communist-party-princelings">they started touring along Wolseley Road, Point Piper for a glimpse of the now demolished $32.4 million property owned by a son of a former vice-president of China</a>. Set high on a hill, above a towering sandstone wall and overlooking Sydney Harbour with picture postcard-perfect views of the bridge, Craig-y-Mor, the Point Piper non-waterfront residence, remains owned by Zeng Wei and his wife, Jiang Mei.
Xu Jiayin, one of China’s richest men, was <a href="/news/guangzhou-evergrandes-chinese-billionaire-owner-xu-jiayin-tipped-as-villa-del-mare-point-piper-buyer">first named by Property Observer</a> as the identity who likely bought the palatial-style 16,230-square-foot Villa del Mare home last November, with the poorly resourced FIRB taking another four months chasing the same paper trail.
The first to likely feel the consequences of Joe Hockey's whistle will be the near Point Piper neighbour, Mandalay which sought to piggyback Villa del Mare's success, in <a href="/news/point-piper-resumes-trophy-home-sales-momentum-into-2015">the emerging sales momentum</a> of Point Piper.
The SMH spruiking of the opulent Mediterranean mansion of a former tobacco executive, William Webb, advised Mandalay was set to challenge the newly set record held for a non-waterfront property in the affluent harbourside suburb, through the Black Diamondz agency.
There is a Chinese saying, 山雨欲来风满楼, coming events cast their shadows before them, but listing agent Monika Tu wouldn't have seen this left field interference from the federal government.
And the Villa del Mare order to sell within 90 days - agents yet to emerge - is hardly likely to yield the best selling conditions between now and the chilly onset of winter for <a href="/news/guangzhou-evergrandes-chinese-billionaire-owner-xu-jiayin-tipped-as-villa-del-mare-point-piper-buyer">Villa del Mare which took three years</a>, on and off, to find a buyer last time.
Possibly the villa will even be jinxed, ruled out by feng shui experts.
There might even be the emergence of a new proverb, Point Piper property is like a ladder, with some climbing up it, others down.
 
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Treasurer Joe Hockey sprinkles hot water on snow in Point Piper divestiture decision

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The lacklustre Australian Treasurer Joe Hockey has announced the forced sale of the $39 million Point Piper trophy home, Villa del Mare.
Its purchase last October was in contravention to Australia's foreign ownership laws for established housing.
The sale has been deemed an illegal purchase because Golden Fast Foods Pty Ltd was a shelf company for the Hong Kong-based Evergrande Real Estate Group.
It is the first divestment order - and huge scalp - in almost a decade, timed exquisitely with the Abbott Government's established residential foreign investment purchasing crackdown.
The ownership trail in the bullish sale by recruitment queen Julia Ross was first detailed<a href="/news/guangzhou-evergrandes-chinese-billionaire-owner-xu-jiayin-tipped-as-villa-del-mare-point-piper-buyer"> by Property Observer last November</a>, but the government decision was announced today, four months later, in timing with the government's latest endevours to correct its political misfortune.
"Today I have made an order under the Foreign Acquisitions and Takeovers Act 1975 (the Act) for Golden Fast Foods Pty Ltd (Golden Fast Foods), to divest the established residential property at 63-67 Wolseley Road, Point Piper, in Sydney," Joe Hockey said.
The Treasurer said the property was bought illegally by Golden Fast Foods, which is ultimately owned by Evergrande Real Estate Group, a large company listed on the Hong Kong Stock Exchange, via a string of shelf companies including in Australia, Hong Kong and the British Virgin Islands.
"Under the Foreign Acquisitions and Takeovers Act (1975) foreign investors must notify the Treasurer through the Foreign Investment Review Board (FIRB) before purchasing residential real estate.
"Golden Fast Foods is a foreign-owned company which failed to notify FIRB of its intended purchase.
"Under Australia’s foreign investment policy, foreign investment should increase Australia’s housing stock. Non-resident foreign nationals cannot buy established dwellings as homes or investments.
"I made this order following advice from the Australian Government Solicitor that the purchase breached the Act. Under the Divestment Order I have issued today, the company now has 90 days to dispose of the property or the matter may be referred to the Commonwealth Department of Public Prosecutions.
"We welcome all foreign investment that is not contrary to our national interest."
The government last month proposed that illegal purchases by foreigners would potentially result in a civil penalty of as much as 25 percent of the value of the property when they are forced to sell it.
 
Joseph Zaja, managing director of Ausin Group which sells property to Asian buyers, suggests the public’s perception about foreign buyers pricing them out of the market was impacting on the government.
"It is an extraordinary measure to use a sale of this magnitude to set an example for the industry,” he said adding enforcing FIRB rules was long overdue. 
Property Observer's initial exposure noted Golden Fast Foods was directed by two Chinese directors Han Xiaoran and Huang Xiangui, both from Guangzhou.
Huang Xiangui is also an executive director at <a href="https://www.evergrande.com/En/about.aspx?uc=team" target="_blank">Evergrande Real Estate Group Ltd</a>, whose billionaire owner Xu Jiayin, (許家印 also known as Hui Ka Yan) is estimated by Forbes to be worth about $7 billion. 
Property Observer gleaned also from <a href="https://jetphotos.net/showphotos.php?regsearch=B-6435" target="_blank">sky tracking websites</a> that Xu Jaiyin, aged 56, was in Australia around the time of the early October sale, having arrived with a team of 25 in his private Airbus A319.
 
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Point Piper's Villa del Mare back for sale as Australian Treasurer thwarts Chinese billionaire

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GUEST OBSERVATION
The federal government’s proposal to charge foreign investors a minimum of $5,000 on residential property investment applications has been couched in terms of <a href="https://jbh.ministers.treasury.gov.au/transcript/033-2015/" target="_blank">ensuring the integrity Australia’s foreign investment regime</a>.
The fees, announced by treasurer Joe Hockey and Tony Abbott while touring a house for sale in Sydney this week, add to the already-revealed <a href="https://www.pm.gov.au/media/2015-02-11/government-tightens-rules-foreign-purchases-agricultural-land" target="_blank">changes around agriculture land ownership</a> that have included reducing the purchase threshold for Foreign Investment Review Board (FIRB) oversight from $252 million to $15 million, and an ATO “stocktake” of foreign-owned agricultural land.
The Treasury has released an <a href="https://www.treasury.gov.au/~/media/Treasury/Consultations%20and%20Reviews/Consultations/2015/Strengthening%20Australias%20foreign%20investment%20framework/Key%20Documents/PDF/Strengthening%20Australias%20foreign%20investment%20framework.ashx" target="_blank">options paper</a> seeking consultation on the proposed changes to residential property investments by 20 March 2015. This is a short timeline for such consultation.
Introduction of fees
Introducing fees for the first time for foreign investment applications to the FIRB is intended to support administration on a user-pays basis. For residential property and agricultural land, the fee would be up to $5000 for each application and increase to $10,000 for every additional $1 million.
For other business, including agribusiness, the initial fee would be $25,000, and $100,000 would be charged where “the value of the target’s assets are greater than one billion dollars”. This includes “sensitive sectors” such as the media, telecommunications, transport, defence and those related to it, as well as “uranium, plutonium or the operation of nuclear facilities”.
No evaluation appears to have taken place in order to establish whether the introduction of fees would act as a deterrent to application, or change the pattern of investment across sectors. In these terms, it is not clear what the intentions of the government are, given that the criteria for evaluation remain open as they are currently.
For applications of large value, the fees proposed remain small. Nonetheless it incurs costs to foreign investors which domestic investors do not bear and it’s hard not to read a subtext of xenophobia, particularly around the level of Chinese investment, a fear which is not largely borne out <a href="https://theconversation.com/dont-be-misled-on-chinese-foreign-investment-read-the-facts-25316" target="_blank">by the evidence</a>.
The fee is higher than that recommended by last year’s Federal Parliamentary Committee into affordable housing and foreign investment, which suggested a “<a href="https://www.aph.gov.au/~/media/02%20Parliamentary%20Business/24%20Committees/243%20Reps%20Committees/Economics/44p/Real%20Estate/Report/Report%20Final.pdf" target="_blank">modest administration fee</a>” of up to $1500, which it said would generate revenue of $158.7 million over four years.
I conservatively estimate the revenue obtained from charging the residential fee - based on <a href="https://www.firb.gov.au/content/Publications/AnnualReports/2012-2013/index.asp" target="_blank">approval numbers</a>, and making the (possibly highly optimistic) assumption that applications would continue to increase above the nearly 13,000 in 2012-13 - would be more than $63 million per year. It is not clear how the expected revenue from the new fees <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2015-02-25/foreign-real-estate-buyers-to-pay-fees-up-to-10000-dollars/6260748" target="_blank">as given by the government</a> of $200 million a year was arrived at.
Still, the government expects to use this to cover the costs of the ATO unit. This is still not large compared with the total value of $135.7 billion for foreign investment approvals in 2012-13.
Extending the role of the ATO
The government has announced a specialist unit within the Australian Taxation Office to support compliance with and enforcement of the foreign investment rules. The government proposes this on the basis that the ATO has the skills, data-matching systems and court experience. Presumably it has consulted the ATO in order to ascertain how well the ATO aligns with this, given that its functions are entirely oriented toward tax collection.
Involving the ATO in this way might call for legislation that determines the functions of the ATO to be amended, as well as changes to the Foreign Acquisitions and Takeovers Act, which regulates FIRB.
On the user-pays basis claimed, $200 million suggests a fairly decent-sized unit at the ATO. The costs for the FIRB and its Division of the Treasury are a mere $4.5 million for 2012-13. <a href="https://www.accc.gov.au/publications/accc-aer-annual-report/accc-aer-annual-report-2013-14/accc-and-aer-annual-report-2013-14/part-1-year-in-review/finance-and-staffing-snapshot" target="_blank">By comparison</a> the entire ACCC cost $182 million in 2013-14. (The <a href="https://annualreport.ato.gov.au/05-financial-performance/financial-statements/cash-flow-statement" target="_blank">ATO cost a whopping $3.8 billion</a> in 2013-14, although consider the Commonwealth tax take of<a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5506.0Main%20Features22012-13?opendocument&amp;tabname=Summary&amp;prodno=5506.0&amp;issue=2012-13&amp;num=&amp;view=" target="_blank"> $338 billion in 2012-13</a>.)
Lack of hard data around rorts
New penalties are proposed for non-compliance with the foreign investment requirements. On its own admission, there is “limited evidence to suggest non-compliance” so it is not clear what the impact would be. The government clearly believes that improved monitoring might unearth it.
Hockey told the <a href="https://mpegmedia.abc.net.au/rn/podcast/2015/02/bst_20150226_0735.mp3" target="_blank">ABC’s Radio National</a>: "There is some evidence that foreigners have been buying existing residential real estate in Australia. That is unlawful and we have at the moment not got the resources at the moment to properly track that, we have no register of foreign ownership of residential land in Australia."
I have written before about <a href="https://theconversation.com/little-hard-data-in-the-hard-area-of-foreign-investment-28893" target="_blank">the lack of hard data</a> in foreign property ownership. The main questions are whether a register means better information will be collected and how the information might be used.
The only measure which looks useful is the proposed improvements to obtaining and keeping an inventory of foreign investment in property by liaising with state titles' offices and other sources of data. This might have been useful as an exercise prior to any other proposals, in order to gain an idea of the scale, value and purpose of land purchase. Again, this would only be meaningful if the equivalent exercise is done in order to compare with domestic purchase.
For instance in existing estimates, foreign purchases of agricultural land remain small. This sort of investment inventory would clarify exactly the differences in treatment of foreign and domestic purchases, and how these align with policy objectives. Availability of such information about land and other resource use would also allow other objectives, for instance in regional, industry, and environmental policies, to be strengthened.
In the end, we need to be able to analyse whether these changes will help us identify the number of foreign investors breaking the rules.
FIRB is already able to prevent any foreign investment above the low existing thresholds on the grounds of (unspecified) public interest. Yet very few proposals are knocked back. It is hard to see how this might change.
None of the measures suggested are backed up by clear evidence as to where they fix existing inadequacies or just what those are. The public interest criteria are not tightened.
<img src="https://counter.theconversation.edu.au/content/38031/count.gif" alt="The Conversation" width="1" height="1">Margaret McKenzie is lecturer, School of Accounting, Economics and Finance at Deakin University.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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MMcKenzie-5kQhUd2GMj

Foreign investment changes should expose the rorters: Margaret McKenzie

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GUEST OBSERVATION
The Abbott government’s lurch at a foreign investment fee to fund the Foreign Investment Review Board (FIRB) will be a minor inconvenience. 
“There is significant global evidence from recent times including Canada, Singapore and Hong Kong where these types of taxes on foreign investment have been totally counterproductive, caused significant corrections within the markets and harmed the construction industry” CBRE residential projects chairman Justin Brown was quoeted as saying in the <a href="https://www.afr.com/p/national/politics/foreign_property_buyers_to_pay_approval_TnnDgOvoNycdqw7V5urAAN" target="_blank">AFR</a>.
The response from the real estate sector has been typical. 
Whilst we are supportive of some traction towards the taxation of excessive real estate profits, the 1% charge will mean little in comparison to last year's capital gains.
As outlined in <a href="https://www.prosper.org.au/2015/02/24/the-foreign-investment-future/" target="_blank">the foreign investment future</a>, the average $3,375,000 FIRB approved investments last year would pay a foreign investment fee of $33,750. The capital gains were running at $229,500. Such a fee will not break the bank.
In that same post I mentioned how effective Singapore’s foreign investment fee of 18% was in maintaining the public interest – low land prices. The property lobby have convinced the news cycle that rising property prices are a good thing. They are if you are a property seller or a bank. For the public this means rising debts and thus interest payments.
We do however see merit in the commentary of Ray White chairman Brian White in comparing such a charge as a stamp-duty like charge. Such a foreign investment fee will curb some demand, impeding turnover.
However, it is likely to be minor as the above capital gains to foreign investment fee comparison demonstrates. Treasurer Hockey was adamant the fee was purely an administrative one so that the FIRB could do its job.
Only $200 million is needed yearly to fund an expanded FIRB. <a href="https://www.firb.gov.au/content/default.asp" target="_blank">Will we get a new website for that?</a> The relative size of such fundraising is again minor to the <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6416.0" target="_blank">$418 billion in land price increases in the 13-14 year.</a>
After a minor skirmish, we expect this will have little imposition on the global land bubble. The fact it is set at a much lower rate than Hong Kong and Singapore ensures global investors will still be set upon buying up locations of inspiring natural beauty.
If the government knew what they were doing, a Federal Land Value Tax would be reimposed nearly <a href="https://en.wikipedia.org/wiki/Australian_Taxation_Office#History" target="_blank">100 years since our first federal tax was announced</a>. Accompanying this would be a significant 5-10% income tax deduction and a doubling of the pension. The LVT would curb speculative foreign investment, reigniting the Australian creative spirit alongside lower land prices and a lower tax burden for all.
Karl Fiztgerald is project director of <a href="https://www.prosper.org.au/" target="_blank">Prosper Australia</a>.
This article first appeared on Prosper's website.
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KarlFitzgerald-5HzVbxHhJb

Foreign investment fee will only be a minor inconvenience: Karl Fitzgerald

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GUEST OBSERVATION 
If the media is to be believed, the reason the real estate market is so hot is due to foreigners, especially Chinese, turning up with blank cheques buying everything in sight.
Apparently Australians are no longer able to get a foothold in the housing market because the playing field is not level. How much of this is true and how much of this is sensationalism and headline grabbing? Let’s explore the facts as they currently stand.
WHO CAN BUY WHAT?
<table style="width: 460px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td>
Australian citizens and permanent residents
</td>
<td>
Can buy any property, new or second hand.
There are no limitations of any kind.
</td>
</tr>
<tr>
<td>
Temporary resident
</td>
<td>
A temporary resident (such as those on student visas of more than 12 months or those who have applied for permanent residency and are on a bridging visa) may acquire one established dwelling only and it must be used as their residence (home) in Australia.
There is a condition which stipulates that the temporary resident must sell the property when it ceases to be their residence.
Temporary residents are not permitted to buy established dwellings as investment properties.
Temporary residents may buy new dwellings, or vacant land to build new dwellings, because these latter purchases increase the available housing stock in Australia.
Temporary residents need to apply to the Foreign Investment Review Board (FIRB) to buy in Australia.
</td>
</tr>
<tr>
<td>
Foreigners / short-term visa holders
</td>
<td>
Only allowed to purchase brand new, off the plan properties, or vacant land for immediate development. 
Foreign residents cannot buy established or second-hand dwellings as investment properties or to live in. 
Foreign residents need to apply to the FIRB to buy in Australia. Such proposals are normally approved without conditions.
</td>
</tr>
</tbody></table>
ARE CHINESE BUYERS REALLY DOMINATING?
There is no doubt that many people of Asian heritage are seen each week at open inspections and auctions everywhere in Sydney. It is easy to jump to the assumption that anyone looking remotely East Asian must be a ‘rich Chinese’.
The reality is that Asian buyers are easy to spot because they look different in a crowd of Caucasians. Nobody really spots the Kiwi or the Brit – but Asians do stand out in physical appearance. However, it is often the case that people of Asian appearance may be second, third or even fourth generation Australians. 
Even if they are newly arrived immigrants who do not speak English, they are as entitled as any other Australian citizens or long-terms resident to buy a property. In addition, many people have difficulty identifying the different Asian backgrounds and lump Koreans, Japanese, Singaporeans, Malaysians, Vietnamese, Thai, Indonesians, etc. all as ‘Chinese’.
Having said this, there has definitely been a significant increase of buyers from mainland China. Many factors have contributed to this rise: cheap Australian dollar, increasing middle class, fear of future instability in China and therefore the need to invest the money offshore, seeking a safe haven for the family by having children educated in Australia, etc. For many mainland Chinese buyers, buying a property is much more than just about having a roof over their head. It is about an insurance policy – and something they are willing to pay a premium for.
SO WHAT IS THE PROBLEM?
The main issue is the lack of tracking system to ensure the rules as outlined above are being adhered to. There have been many claims of foreigners breaching the rules of investment. However, last year's parliamentary inquiry heard that the FIRB had not prosecuted a single case since 2006, rendering it essentially ineffective.
WHAT DOES THE GOVERNMENT PROPOSE TO DO?
Yesterday, <a href="/expert-insights/investing/10-000-firb-fee-to-buy-1-million-plus-home-tony-abbott-policy-unveiled">the Treasury released a proposal </a>on “Strengthening Australia’s Foreign Investment Framework”. It is a discussion paper which is open for public comments until the 20 March 2015.
This discussion paper forms the basis of the government’s consultation on reforms to the foreign investment framework. The proposed reforms include:
<ul>
<li>increasing compliance and enforcement activities around foreign investment in residential real estate through the creation of a specialised investigative and enforcement area within the Australian Taxation Office; and</li>
<li>introducing new civil penalties and increased criminal penalties for foreign investors and third parties who breach the foreign investment rules.</li>
</ul>
The government is looking at setting up a new register of foreign investors in both residential and agricultural real estate, with fines of up to 25% of the value of the property for any breaches.
Consideration is also being given to the introduction of an application fee on all foreign investment proposals – this is expected to raise $200 million a year. This is not to act as a deterrent to foreign investment, but to fund the costs of better data collection, screening, compliance and enforcement activities. A more sophisticated data matching systems drawing information from various government agencies such as the Treasury, Tax Office and Immigration is desperately needed and needs to be funded.
For residential real estate and rural land acquisitions, the proposal is for a fee of up to $5,000 that would apply to properties valued under $1 million. Applications to purchase a property equal to or greater than $1 million would be subject to a fee of up to $10,000. This would then increase in increments of up to $10,000 for each additional $1 million in property value. (e.g. For a property up to $2 million, the fee payable would be $20,000. For a property up to $3 million, the fee payable would be $30,000, etc.)
The proposed fees are much higher than the $1,500 recommended by last year's parliamentary inquiry into foreign investment.
IS THIS GOING TO WORK?
Foreigners who have the discretionary funds to purchase a property in Australia will probably not even blink at needing to pay this extra fee. So this is certainly a good fundraising opportunity for the government. For the majority of our foreign buyers, they are purchasing in cash. So a fee of $5,000 or even $30,000 for that matter is really small change for them. We anticipate this will have near zero deterrent effect – but then again, the government has stated that this is not intended to be a deterrent but a fundraising activity.
However, in addition to better enforcement of the current FIRB restrictions, there needs to be a more rigorous review of the current stamp duty structure. A very good model to learn from is the tiered stamp duty that Singapore recently phased in. To kerb overwhelming foreign interest in Singaporean residential properties which skyrocketed prices, the government introduced differing levels of stamp duty payable by citizens, permanent residents and foreigners. What is particularly interesting about the Singapore model is that they also charge additional stamp duty for those who own more than one to two residential properties. There is also special stamp duty on properties sold within three years: 10 to 20% of purchase price, depending on when sold. This was intended to prevent speculative buying.
So while the proposed enforcement reforms are certainly much needed, the separate question which needs to be asked is whether the current rules and tax structure are effective enough to begin with?
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">Shane Oliver</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds. 
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