Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
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Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

PDG secures approval for $1.5bn Southbank apartment development, The One

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

Foreign Buyers

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The Prime Minister’s clampdown on foreign investors in Australian real estate has been revealed as little more than a revenue raising exercise.
After all the posturing, this is what it comes down to: a cash grab. Politicians doing to real estate what they always do to real estate: using it as a cash cow.
Overseas buyers will be charged hefty fees for the privilege of buying Australian real estate and Australian developers will be charged the same hefty fees for the right to sell to them.
Otherwise nothing will change in the national property landscape. Not a single sale price will be reduced or not one first home buyer will be better off.
As well as a cash grab, the Tony Abbott move on foreign investment is also a push for popularity by appearing to be doing something for the ordinary bloke. But the thinking is so fuzzy and the policy delivery so confused that it won’t achieve even that shallow objective.
I listened to Abbott announcing and justifying the proposed policy and it was clear he had not sorted out his thinking. The arguments simply didn’t stack up.
He was still trying to infer that somehow this will help battlers achieve the 'Great Australian Dream' but couldn’t explain how this policy will achieve that.
He maintained that foreign investment was important to Australia and that foreign buying increased supply and therefore made dwellings more affordable for the ordinary bloke, but couldn’t explain how these new punitive measures would help to achieve that, when they appear set up to discourage and curtail foreign investment.
It’s all rather bizarre.
There are measures to clampdown on developers who focus their marketing overseas without trying to sell their high-rise apartments locally. But foreign investors are the sole reason most of these highrise buildings are being planned. This is particularly true in over-supplied markets like inner city Melbourne and downtown Brisbane.
They’re not designed for local consumption. Without most, if not all, of the units being sold offshore, these projects will not be built.
That will reduce supply, which theoretically places upward pressure on prices. And it will reduce construction activity, which is deemed the economic savior of the nation at a time when resources investment is declining.
The bottom line is that restraining foreign investment won’t make Australian dwellings more affordable. It will do nothing to change the situation for first time buyers.
Foreign investors are a very small component of the Australian buying market. Their activity is primarily focused on Top End properties in the prestige suburbs of Sydney and Melbourne, and on highrise apartments in the inner city areas of our major cities.
They are not competing with local first time buyers. Restricting foreign buyers won’t change the price on a single house anywhere in Australia. It won’t stop people of Asian appearance (dubbed foreign buyers by disgruntled under-bidders) from winning bidding wars at Sydney and Melbourne auctions of prestige property.
It’s a Yes Minister scenario, designed by Sir Humphrey Appleby and delivered by a befuddled Jim Hacker, who somehow got the pages of the script mixed up - again.
TERRY RYDER is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
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terryryder-YECXbqmri2

Abbott's foreign investor cash grab built on bizarre logic: Terry Ryder

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Currently no fees apply to foreign investment applications in Australia.
But there will be soon following the House of Representatives Economics Committee report recommending the government apply a modest administrative fee to the current screening for all foreign purchases of residential real estate, including purchases by temporary residents, to fund compliance and enforcement activities.
It will apply to residential, commercial, developer, business and rural applications.
Business, commercial real estate and agribusiness investments would be subject to <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">application fees between $10,000 up to $100,000</a> depending on the size and sector.
<img src="/images/2015/02/25/firb-feb-25-one.jpg" alt="">
Source: Treasury department
The government is seeking reaction to the proposals and will make a final decision after 20 March.
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jchancellor-FAypfDUnLy

Fees for foreign acquisitions of Australian commercial property set to be introduced

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Foreigners approved to buy established residential properties will have to pay extra when they purchase through the Foreign Investment Review Board (FIRB) under laws proposed by the federal government.
A $5,000 fee will be payable on FIRB approved properties valued under $1 million, while a $10,000 application fee will apply at over $1 million. It will be $20,000 above $2 million, then rising incrementally.
Fines of up to 25% of the value of the property will be made for non-compliance as part of the Abbott government's new regime.
There will be a four week community consultation to consider the proposals by the <a href="https://www.treasury.gov.au/ConsultationsandReviews/Consultations/2015/Strengthening-Australias-foreign-investment-framework" target="_blank">Australian Treasury</a>.
There are big changes which will affect the off the plan market, though no plan to put a buyer fee for off-the-plan.
Property developers seeking an advanced off-the-plan certificate will instead be levied an application fee based on the number of dwellings sold to foreign investors, based on the $5,000 under $1 million fee, and then the rising scale. 
Currently, property developers can apply for an advanced off-the-plan certificate to sell new apartments in a development of 100 or more to foreign investors (the investor does not then need to obtain separate approval). 
These certificates are granted on the condition that the apartments are marketed in Australia, as well as overseas, to ensure that domestic buyers have the same opportunity to purchase the apartments. However, there are currently no penalties for breaching this condition.
The House Economics Committee report recommended a tightening of the rules around advanced off-the-plan certificates to ensure developers comply with their obligations to market properties to domestic buyers.
Recognising these concerns, the Government proposes to strengthen enforcement options by subjecting developers to civil and criminal penalties under the Act.
In addition, the Government is proposing to tighten the rules around the use of advanced off-the-plan certificates by limiting the value of all apartments that can be bought by a single foreign investor to $3 million in any single development. 
If foreign investors want to purchase apartments above this value, they would have to seek individual approval. This would reduce the scope for any criminal behaviour (such as money laundering) by ensuring that high wealth investors are subject to the upfront screening process. 
Many of the proposals go further than those recommended by Kelly O'Dwyer's Parliamentary committee, but Prime Minster Tony Abbott said it will mean that foreigners who aren't playing by the rules won't be in the system.
"There are millions of Australians who want to realise the dream of owning their own home," said Abbott.
"Obviously we want the dream to continue."
Abbott said the fee structure was comparable with a system in New Zealand, through less punitive than regimes in Singapore and Hong Kong.
The fees would raise $200 million a year which would fund FIRB scrutiny and the establishment of a register of foreign home owners.
Non-resident foreign persons are generally prohibited from purchasing established dwellings in Australia.
However, reflecting the fact that foreign persons who are temporary residents need a place to live during their time in Australia, temporary residents can apply to purchase one established dwelling to use as a residence while they live in Australia. 
The purchase of an established dwelling is conditional on the foreign person selling the property when they leave Australia.
Temporary residents cannot acquire established dwellings for investment (rental) or holiday purposes.
Under the Act, it is a requirement that each proposed acquisition of real estate be individually notified and reviewed, unless specifically exempted.
However, property developers (Australian or foreign) can apply for an advanced off the plan certificate to sell all new dwellings in a development of 100 or more dwellings to foreign persons, provided the development is marketed locally as well as overseas.
Foreign persons purchasing dwellings in a certified development do not require separate approval. 
But the government seeks feedback on proposed changes to advanced off the plan certificates, including:
<ul>
<li>Should penalties be introduced for developers that fail to comply with obligations to market domestically?</li>
<li>If so, what should developers be required to do to prove they have marketed domestically?</li>
<li>What level of penalty would be appropriate for developers that fail to comply with obligations to market domestically?</li>
<li>Are there alternative approaches that should be considered </li>
</ul>
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$10,000 FIRB fee to buy $1 million plus home: Tony Abbott policy unveiled

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GUEST OBSERVATION
With Sydney’s clearance rate hitting 87% on the weekend and a modest three bedroom weatherboard homes selling for $1.36 million, (some 40 minutes commute from the CBD), concerns over the role of speculative investment continue.
The ‘golden ticket’ to fast track residential status, the Significant Investment Visa (SIV), has seen <a href="https://news.domain.com.au/domain/real-estate-news/significant-investor-visa-approvals-increase-fivefold-in-a-year-20150220-13kkzr" target="_blank">a five-fold increase in applications</a> over the last year. This program has attracted$3.2 billion in investments. Direct investments in real estate are not recognised as a qualifying factor.
The federal government has expanded such incentives with the Premium Investment Visa, developed for those willing to make a $15 million investment in non-real estate related investments. We commend the government for recognising further investment in real estate undermines the competitiveness delivered by lower land prices.
However the carefully worded statement by Minister Robb <a href="https://trademinister.gov.au/releases/Pages/2014/ar_mr_141017.aspx" target="_blank">announcing the Premium Investment Visas said</a>:
"Minister for Trade and Investment Andrew Robb said that direct investment in residential real estate would not be a complying investment under the government’s proposed new Premium Investor Visa (PIV)."
Repeat – ‘no direct investment in real estate’. This implies real estate investment trusts (REITs) and other managed investments into real estate are allowed, encouraging both the further centralisation of economic power and additional investments in land. Those in the finance and real estate sectors will be delighted.
The chair of the parliamentary inquiry into foreign investment, Kelly O’Dwyer, said <a href="https://www.kellyodwyer.com.au/housing-supply-affordability-and-investment-address-to-the-committee-for-economic-development-of-australia/" target="_blank">in a speech last week:</a>
"Non resident foreign investors, while they can purchase new dwellings cannot generally purchase existing dwellings.
"Applications to purchase new dwellings are therefore generally granted, while applications to purchase existing homes are only granted if the purchaser is a temporary resident.
"So who is a temporary resident and what are the rules? Temporary residents in Australia, that is those people who have a visa to reside in Australia for over 12 months, are allowed to purchase an existing dwelling as a home but they must divest that home within three months of leaving the country at the expiry of their visa...
"The Committee found that there were loopholes in the current framework – that far from penalising individuals who made illegal purchases, in some instances it rewarded them.
"Let me give you an example. If a non-resident foreign person purchased an existing home this would be contrary to the rules. Just as it would be if that non-resident foreign person purchased multiple existing homes.
"Under the current regime, if FIRB found out and successfully divested that person of those properties – and those properties had appreciated in value from the time of purchase to the time of sale, that non-resident foreign investor would get to keep the windfall gain.
"Clearly this loophole needs to be closed."
Finally a recognition of windfall gains! If the naturally rising value of land is not fit for unlicensed foreign investors, does that mean in time the public will question all windfalls as <a href="https://www.prosper.org.au/georgist-glossary#Unearned%20Income" target="_blank">Unearned Income</a>? If the community creates that value through their development, their existence, shouldn’t they too benefit? O’Dwyer continues:
"All foreign investors in residential real estate must apply for approval from the FIRB prior to purchase.
"According to the most recent FIRB statistics, last financial year, FIRB approved foreign investment into residential property of around $34 billion, double the $17 billion approved during 2012-13.
"Much of this investment is concentrated in the Melbourne and Sydney markets. Approximately 80% of total investment is attributable to new property, which at over $27 billion 2013-14 is 170% higher than 2012-13.
"The total number of established property approvals for 2013-14 is nearly 8,000 as compared to just over 5,000 for 2012-13."
The 8,000 approved foreign investments averaged $3,375,000 – with totals up 170%!
We fear the foreign investment ‘tightening’ further elaborated on in O’Dwyer’s speech will do little to stem the tide of international capital.The capital gain on a $3,375,000 investment at the national average of 6.8% for the last year equated to $229,500 (<a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6416.0" target="_blank">ABS 8 Capital Cities</a>). A $1,500 application fee for purchases limited to new stock only, alongside the rigmarole of applying via the Foreign Investment Review Board, will do little when such large amounts are being invested on average.
If the windfall gains for an illegal foreign investor are to be forfeited to the government, then why not all such capital gains? The conflict between sovereignty and savvy investment is mounting in the eyes of <a href="https://www.prosper.org.au/2015/02/19/the-rotting-fruits-of-a-100-year-old-trend/" target="_blank">the speculative onslaught</a>. Foreign investment is a direct challenge to the control of national resources.
Singapore has taken <a href="https://www.smh.com.au/business/a-highendproperty-collapse-in-singapore-20150219-13jkf5#ixzz3ScPhbzcR" target="_blank">a more direct approach</a>.
As progressive as that is, refinement is needed. A <a href="https://www.prosper.org.au/2012/10/02/council-rating-subsidies/" target="_blank">property tax penalises improvements</a> – install solar or renovate and you are penalised under this perverted system. This is not productive. The tax should focus on land values. Rising locational land values are the trigger for property price increases, so that is where the focus need be. The <a href="https://www.iras.gov.sg/irasHome/page04.aspx?id=2094" target="_blank">Singaporean property tax does the opposite, by not including any land value</a>. This will encourage run down properties (accompanied by generous depreciation allowances no doubt).
It must be noted Singapore has also imposed additional measures limiting debts to income ratios.
Despite the property tax shortfalls, Singaporean property prices fell 4% last year, with further falls to come. After a close election with foreign investment a major election issue, we hope the political elite can hold their nerve in the face of the predictable vested interests backlash. Perhaps the recent five year extension of <a href="https://www.bloomberg.com/news/articles/2015-02-23/singapore-to-extend-tax-breaks-for-property-trusts-by-five-years" target="_blank">the tax amnesty on REIT foreign earnings</a> is a payback for such reform.
For Australia, the much vaunted housing supply mantra is being undermined by foreign investment in new homes. New re-zonings are being snapped up off the plan as a safehaven to park money. The mobility of capital is set to increase alongside technology, ensuring the commodification of housing escalates as the global housing marketplace matures. Housing supply alone cannot keep up with international demand for a commodity returning (barely taxed) huge capital gains.
<a href="https://www.prosper.org.au/wp-content/uploads/2014/11/Speculative_Vacancies-2014_final.pdf" target="_blank">Our recent report</a> highlights the underutilised nature of many prime locations. It is important this measure expands to other cities to help the public understand just how extensive speculative holdings of housing are becoming. Then perhaps a more vocal political opposition will develop.
Until the unearned incomes in real estate are more highly taxed, the pressures on those trying to find a place to live will continue to grow.
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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Foreign investment is a direct challenge to the control of national resources: Karl Fitzgerald

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Federal Liberal MP Kelly O'Dwyer says there is "no one silver bullet" when it comes to housing affordability.
However, at speech made today to the Committee for Economic Development of Australia (CEDA), O'Dwyer, who stood as the chair of a Federal Parliamentary inquiry into the role of foreign buyers in Australia's property market, noted the role of foreign investors in increasing housing supply.
"One of the most critical things I think that the government can do is make sure that we encourage foreign investment," she said.
O'Dwyer said foreign investment was "absolutely critical" to the supply of new dwelling stock and alleviating price pressure.
"This is something that the house standing committee on economics heard a lot about.
"We received evidence from not only economists and academics but also the Reserve Bank of Australia, who said that if you can increase dwelling stock, this has an impact on price... you can keep costs reasonably contained."
O'Dwyer answered questions to CEDA members following a speech on foreign investment, where she invoked the classic Australian comedy The Castle, referencing Australia's enthusiasm for home ownership. Having earlier commented on the Foreign Investment Review Board's (FIRB) lack of action on breaches of current regulation, which requires most foreign buyers to only purchase new housing stock, O'Dwyer noted the opposite effect that foreign investors can have in the established housing market.
"Now, when it comes to existing dwellings, it's somewhat different," she said.
"When there is restricted supply and increased competition, that will also have an impact on price."
O'Dwyer did, however, maintain that the issue of affordability remains a complex one.
"Now, I don't think it's the government's role to determine the price of people's home. It's the government's role to make sure the policy settings are broadly right, so that we encourage new dwellings to be constructed, so that we make sure that there are options for people... to purchase, to rent, or to build themselves.
"And this is a really complex equation. There is no one silver bullet to housing affordability, but we have to look at all these elements combined in order to make sure the dreams of particularly young Australians, to be able to purchase or own their own home – are still going to be a reality for them as they were for their parent's generation."
While O'Dwyer stressed the number of different factors affecting housing affordability, Prime Minister Tony Abbott <a href="/expert-insights/buying/tony-abbott-suggests-foreigners-pricing-out-young-home-buyers">also commented earlier this week</a> on his plans to tighten regulation around foreign investment to protect first home buyer's, saying "obviously, the last thing we want to be doing is pricing young home buyers out of the market".
 
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Foreign investment "absolutely critical" to increased housing supply: Kelly O'Dwyer

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Tony Abbott is on a yellow card and is one major mistake away from being red-carded.
Another display of the bad judgment for which he has become infamous and he’ll be kicked out of the game by his own team.
Un-phased, the Prime Minister is already working on his next own goal.
He’s made it known that he’s going to clamp down on foreign investors. Someone has managed to convince him that somehow this will bring down the price of houses and first home buyers across Australia will rejoice.
He’s getting seriously bad advice from somewhere. He could eliminate every foreign investor from the Australian residential landscape and it wouldn’t reduce a single home price.
Of all the buying sectors in residential property – first time buyers, next time buyers, local investors and foreign investors – overseas buyers are the smallest and least influential. The recent NAB survey confirmed this.
In the established homes market, where first home buyers are most active, overseas buyers are a negligible component.
Foreign investors are active primarily in the new homes market. They buy highrise apartments off the plan in the major inner city markets. This is not a market for first home buyers.
These two sectors – first home buyers and foreign investors – are not competing in the same space.
Abbott’s stance is an outcome of the federal parliamentary inquiry into the “affordability crisis”. This has been a farce from the beginning because it was based on the notion that first home buyer numbers had dropped alarmingly – which is now revealed as a miscount by the Australian Bureau of Statistics.
So the initial premise arose from a mistake and Abbott proposes to compound the error with another, by blaming an innocent party for a non-existent problem.
The inquiry received evidence that foreign investors assist first home buyers because they’re the motivation for the construction of multiple highrise apartment buildings. The increase in supply is deemed likely to bring down prices, thereby assisting first time buyers.
I would suggest that’s a flimsy argument, but that’s what the pointless inquiry was told.
The strangest thing in all this is that the Prime Minister imagines Australians will thank him if he succeeds in reducing the value of homes across the nation. Given that seven out of 10 households own their homes, he’s on a confirmed loser with this one.
But whatever he does with foreign investors won’t affect the pricing levels created by market forces.
Once again, politicians are tinkering at the edges of the affordability issue. A leader serious about making new homes more affordable for first time buyers would address the single biggest issue – the taxation component in the cost of a new home.
New homes are a lot more expensive that established ones (which is a primary reason why first timers target established homes). The research indicates that as much as 40% of the price of a new house and land package is government fees and charges.
Dealing with that is simply not palatable for your average politician. Abbott is doing what politicians always do with the affordability issue – they talk about it a lot, but in essence they do nothing meaningful. A solution is within their power but they refuse to go there.
So the chosen course of action is once again taken from the scripts of Yes Minister. Find an unpopular minority and vilify them in speeches and press conferences, but at the end of the day do nothing that changes the status quo.
It won’t take long for people to realise that waving a stick at foreign investors hasn’t changed anything for first home buyers.
Poor Tony. When he needs to be riding a winner, he’s flogging a dead horse.
Or is it a case of dead man walking.
TERRY RYDER is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
If you missed our free webinar with Terry Ryder, 'The Best and Worst for 2015: Top 5 Hotspots and 5 Places to Avoid', you can <a href="https://propertyobserver.us2.list-manage.com/track/click?u=24bd0766a834290948593f5aa&amp;id=2e37cb3570&amp;e=035e81ff9a" target="_blank">watch the video or download the slides here</a>. 
 
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Dear Tony, waving a stick at foreigners won't help first home buyers: Terry Ryder

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Recently, the House of Representatives Economic Committee Report on Foreign Investment in Residential Real Estate was released.
The report made 12 key recommendations, one of which was better funding of the Foreign Investment Review Board (FIRB), because currently there is a complete lack of creditable information on the true extent and nature of foreign investment into residential property. As might be expected the report has received a mixed response. It has not been welcomed by the majority of public comments posted on various news websites.
Let’s examine some of the background that led to the committee looking at this area of policy. In a recent post I noted that the local housing construction industry was worth almost $70 billion, employing some 1,037,412 people in 2014. When talking about foreign buyers and residential property I use these figures as a starting point to help illustrate how important this sector is as a driver of our economy, and it’s a point that was repeated in Friday’s report.
The role of foreign investment in our market can be an emotional subject, and it remains so. It is also a very complex issue for a country with a growing population and a somewhat mixed economic outlook.
The Plight of First Time Buyers
There has been clear evidence for some months now that first time buyers are being squeezed out of the housing market. Australian Bureau of Statistics (ABS) finance statistics show that in September 2009 first time buyer finance stood at 26.1%, by September 2010 that figure had fallen to 15.5%. In the most recent ABS figures there was a slight increase but the figure is now down to 12.0%, and the average loan has increased to $326,500, which in the Sydney market would not stretch that far.
Also, in the most recent ABS figures, investment finance for the month grew by 1.7% and owner occupier finance only grew by 0.1%, and this continues a long-term trend. The reasons for these trends are very complex, but on the surface, they do create an emotional picture of the plight of some sections of the housing market.
The emotion is partly illustrated by a <a href="https://www.change.org/p/the-executive-members-toughen-the-regulations-for-foreign-investment-in-australia" target="_blank">current online petition</a> posted on change.org. The petition started in response to the Economics Committee’s review which called on the Federal Government to "toughen the regulations for Foreign Investment in Australia". It attracted some 32,300 supporters (signatures) and a wide variety of mainly sympathetic followers. A key element of the petition was the fact that only 33 of the reported 5000 sales of established homes to foreign buyers over recent years have been investigated by the FIRB.
That’s a very small number and so, understandably, it makes the FIRB rules an easy target. However figures from the FIRB show that in the first nine months of the last financial year foreign residential property investment was $24.8 billion – a 44% increase over the amount approved for the whole of the 2012-13 financial year, which only further points to the fact that the FIRB may be under-resourced.
In the report the committee also made reference to these figures and agreed the FIRB was not doing an acceptable job, which it recommends be fixed.
The petition and the concerns of its sponsor (Simon Hosking) had been brought to the attention of Kelly O’Dwyer, Federal Member for Higgins and Committee Chair of the Parliamentary Business Committee’s House Economics Foreign Investment in real estate. In part of her response, published on the petition’s website and issued ahead of the main report, O'Dwyer states:
“… The Committee is taking a holistic approach to examine whether the current policy settings are delivering the best outcomes for the Australian economy and increasing housing availability, as they are designed to do. Australia’s foreign investment policy, as it applies to residential property, is intended to boost the supply of new housing and thus provide both economic and social benefits. The policy seeks to channel foreign investment in the housing sector into activity that directly increases the supply of new housing (such as new developments of house and land, home units and townhouses) and brings benefits to the local building industry and its suppliers…”
 This article continues on the next page. Please click below.
<hr class="system-pagebreak">
Blame game or market reality
The debate around foreign investment in residential property comes at a time when prices and demand have both been increasing, a very obvious trend in Sydney and Melbourne and to a lesser extent in Brisbane and other centres. These cities are also attracting the bulk of foreign buyers and foreign development capital and investment.
In part, the trend is being ‘blamed’ for higher prices and at one end of the market. That blame extends to the trend locking first time buyers out of the market.
Again, ahead of the main report, here’s what Committee Chair Kelly O’Dwyer said in response to the Simon Hosking petition. The  same views were reinforced in the main report:
“…Consistent with this principle, foreign investors are able to seek approval to purchase new dwellings and vacant land for residential development. Foreign investors cannot generally buy established dwellings as investment properties or homes; however, temporary residents can apply to purchase one established dwelling to use as their residence while in Australia. The acquisition of residential real estate by foreign investors is regulated by the Foreign Investment Review Board (FIRB). It has become clear from evidence presented to the Committee that FIRB has not prosecuted a single case since 2006. It is also clear that there are problems with processes at FIRB, resources and the penalty regime. The Committee is due to report later in the year…”
However only last week ahead of Friday’s report, this same committee knocked back a proposal that foreign property buyers be levied an extra stamp duty as a possible way of helping to fix the housing affordability crisis, and dampen offshore demand.
There seems to be a fairly entrenched ‘hands-off’ approach being adopted, although a purchase application fee of $1500, that would raise $158.7 million over four years, appears to have general support. Such a fee would by no means act as a penalty.
Returning to the idea that foreign investment is somehow having a negative impact on the market (by forcing up prices), I think we should also look at how different the Australian economy has become over the past two decades.
Because the housing market is part of a big picture and it has to be seen in the wider context. The importance of direct foreign investment across our economy is illustrated by the fact that in 1990 Direct Inward Investment Stocks was US$80,333 million, however, in 2012 that figure had grown to US$604,257 million. Over the same period Australia’s outward flow of Direct Investment Stocks has grown from US$37,491 million to US$424,489 million. I quote the figures to illustrate the fact that the international flow of investment funds is a fundamental to any economy.
The rush to secure Free Trade Agreements is further evidence of this fact. Last week Australia and China signed an FTA, and it is yet to been seen if this will have any impact on the flow of funds into residential property both buying existing projects and for new developments, and if this will be a positive or not for the market.
On first reading of the China/Australia Free Trade Agreement, because of the freeing up of many of the service sectors, this may well be a positive for Sydney and Melbourne, because these two cities are so closely aligned to the professional services. Law, finance, education, tourism, health, engineering and manufacturing are all seen as having potential benefits and growth in these areas plus other key areas should create more demand for commercial and residential accommodation in Sydney and other cities.
However, again illustrating how emotional this topic has become, there are suggestions that the various free trade agreements will further harm the prospects of ‘local’ would be home-buyers. But I do not see any foundation for this assumption.
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pchittenden-eLqUUC8TWW

The housing market and foreign buyers: A blame game

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Guest observation
The federal government has missed an opportunity to give serious thought to housing affordability in Australia. The <a href="https://www.aph.gov.au/~/media/02%20Parliamentary%20Business/24%20Committees/243%20Reps%20Committees/Economics/44p/Real%20Estate/Report/Report%20Final.pdf">House Standing Committee on Economics</a> recently released its report on individual foreign investment in residential real estate. The report received <a href="/expert-insights/investing/mixed-reactions-to-federal-foreign-buyer-inquiry-recommendations">mixed reactions</a>.
Media debate about Chinese property investment and housing affordability in major Australian cities almost certainly informed the rationale for the inquiry. So it was surprising the inquiry’s terms of reference provided little scope for investigating the relationship between foreign investment, house prices and affordable housing solutions.
As the report heads to the government archives, it is worth pausing to reflect on the history of Asian real estate investment in Australia. Over the last three decades, media coverage of the Asian property invasion narrative and the federal government’s geopolitical positioning have developed an interesting circularity. This history tells us much about the lost opportunity.
The Asian property invasion narrative
Individual foreign investment in residential real estate in the United States, United Kingdom, Canada and Australia is a longstanding political issue. Over the last five years the changing nationalities of foreign investors in these countries has garnered considerable political and media attention.
Not since the 1980s has media attention been as focused on the foreign investment practices of Asian investors. In 1983 The Sydney Morning Herald reported “Our Asianisation is gaining pace”. By 1987 The Bulletin reported on “The new Asian invasion: how Australian property is being sold off”.
<a href="https://dro.deakin.edu.au/view/DU:30000419">Joseph Hajdu’s</a> analysis of media in the 1980s shows “people believed that the flow of Japanese money was a prime cause of … property inflation” and resulted in “increasing financial difficulties being faced by first home buyers”.
Recently, an audience member of ABC television program <a href="https://www.abc.net.au/tv/qanda/txt/s3946770.htm">Q&amp;A</a> asked: “Why are the Chinese allowed to buy up Australian property? This is inflating the price and sentencing a whole generation to renting.”
The recent inquiry offered hope for a more balanced appraisal. Yet, similar to the 1980s-90s, broader geopolitical forces were at play.
The geopolitics of Australia in the Asian Century
Joseph Hajdu argues that the “rise in anti-Asian sentiment was the last thing” the federal government wanted in the late 1980s when it was “trying to persuade the public that Australia’s future lay with Asia”.
There are surprising parallels between Australia’s focus on Asia in the 1980-90s and the position of more recent federal governments. The Hawke government’s pro-Asia geopolitical discourse of the 1980s was revived in the Gillard government’s 2012 <a href="https://www.murdoch.edu.au/ALTC-Fellowship/_document/Resources/australia-in-the-asian-century-white-paper.pdf">Australia in the Asian Century</a> white paper.
During both periods, government discourse has been filled with pro-Asian political sentiments and regional commitments.
In the mid-1980s the federal government argued Australia was a part of Asia. In cooperation with Japan, the government established the first <a href="https://www.apec.org/About-Us/About-APEC/History.aspx">Asia Pacific Economic Cooperation (APEC)</a> meeting in Canberra. Now the Abbott government is moving forward with a <a href="https://dfat.gov.au/fta/chafta/">China-Australia free trade agreement</a>.
The Abbott government, like the Gillard and Hawke governments, seeks to attract Asian capital. It is no surprise, therefore, that Asian real estate investment has recently shown a corresponding rise.
This geopolitical landscape leaves little scope for removing foreign investment in Australian property. <a href="https://www.smh.com.au/federal-politics/political-news/tony-abbott-says-australia-benefited-from-foreign-investment-because-it-was-unsettled-before-the-british-20140703-zsvby">Prime Minister Tony Abbott</a> has been quoted as saying:
<blockquote>
“As a general principle we support foreign investment. Always have and always will.”
</blockquote>
This article continues on the next page. Please click below.
<hr class="system-pagebreak">
The limitations of the inquiry
The terms of reference for the inquiry were driven and limited by these political concerns.
Abbott’s comments implied that recommendations advocating reduced foreign investment were off the inquiry agenda. At the same time international real estate companies within Australia have risen in recent prominence. At the Brisbane Global Café, a precursor event to the G20, one of the speakers was the <a href="https://list.juwai.com/news/2014/10/andrew-taylor-of-juwai-com-to-speak-at-g20-curtain-raiser">Australian chief of Juwai</a>, one of the largest Chinese-speaking online real estate firms.
Meanwhile, the inquiry failed to consider in any detail how foreign investor taxes or developer contributions could be used to provide affordable housing solutions. It could only focus on general supply and demand issues.
A lost affordable housing opportunity
The inquiry had the chance to turn the initially parochial, <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2014-02-25/rogers-chinese-investors-myth-vs-reality/5281538">perhaps even racist</a>, response to Chinese investment into a productive discussion. It missed that opportunity.
The inquiry <a href="/news/no-surprises-in-kelly-odwyers-12-firb-report-recommendations">concluded</a> by recommending foreign investment rules for residential real estate should be retained. It indirectly blamed real estate agents, financial advisers and legal professionals for assisting foreign investors to break the rules.
Foreign nationals invest in Australia because our political, financial and housing systems facilitate their capital. Given that foreign investment is here to stay, governments need to consider how foreign capital should be used to achieve better social outcomes.
It is unclear if foreign <a href="https://www.firb.gov.au/content/Publications/AnnualReports/2012-2013/_downloads/FIRB-Annual-Report-2012-13.pdf">investor capital</a> will continue to grow. If it does, there are innovative ways to use this capital to increase affordable housing supply. This may include channelling these funds into areas where housing is needed most and for the benefit of those low-income families most disadvantaged by increasing property prices.
The inquiry found foreign investors might not be part of Australia’s housing affordability problem. However, it failed to investigate if foreign capital, taxation settings and equitable housing policies could be brought together to achieve a better outcome for those who are being closed out of an increasingly expensive property market.
<img src="https://counter.theconversation.edu.au/content/34960/count.gif" alt="The Conversation" width="1" height="1">Dallas Rogers is a research fellow at the Urban Research Centre at <a href="https://theconversation.com/institutions/university-of-western-sydney">University of Western Sydney.</a>
This article was originally published on <a href="https://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/foreign-investment-in-real-estate-inquiry-a-lost-opportunity-34960">original article</a>.
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po-LsXgBTHBmX

Foreign investment in real estate inquiry: a lost opportunity

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GUEST OBSERVATION
A petition calling for tighter rules on foreign ownership of Australian property has over 26,000 signatures, highlighting public disquiet over foreign buyers, as reported by Sydney Morning Herald.
Chinese buyers are often the target of this, as they are visible at home auctions particularly in Sydney. Yet the Canadians are only just behind them.
So how big an influence are foreign buyers on the residential market? Available figures tend to be confusing and contradictory.
On 27 November the House of Representatives issued a report into the FIRB which was critical of the current compliance procedures, and highlighted how easy it currently is for overseas buyers to avoid the rules. 
It is recommending an overhaul of compliance procedures, in particular that the land titles systems in each state be amended to record the citizenship and residency of buyers so that we have accurate information on buyers and can monitor their compliance. 
Also, it recommends that substantial fines be introduced for non-compliance, and that any capital gains on a non-complying property be taken by the government. While it seems clear that the rules should be properly enforced, it will have no impact on the level of overseas demand.
According to the FIRB, foreign investors doubled their presence in the market in the last year, when they purchased 5,755 homes worth $5.5 billion at an average of $955,000 per property. There are two key points to make about this:
<ol>
<li>Last year, in our capital cities, there were a total of 309,124 residential sales. Foreign investors accounted for only 1.86% of all sales, hardly a dominant figure. </li>
<li>At an average of $955,000 per property, foreign buyers were generally in a price bracket above that of most domestic buyers, where the overall median price was $468,500. Put another way, foreign buyers purchase property that is twice the price of the typical domestic buyer.</li>
</ol>
Of course, foreign buyers tend to focus on certain markets, so their influence is disproportionately higher in Sydney inner suburbs, and Melbourne, though they are making inroads into the Brisbane market. They are broadly grouped into two types:
<ol>
<li>Foreign students can buy property while they are studying at university. Probably funded by parents, this market targets units in university catchment areas, and they can buy existing homes. Overseas families are also accused of using lawyers or other service providers as proxies to buy property, though data is not available. </li>
<li>Other foreign buyers are restricted to purchasing new property off the plan.</li>
</ol>
The new unit market appears to be oversupplied in major markets, and not surprisingly developers are supporters of the right of foreign buyers to purchase off the plan, without which a serious oversupply might be emerging.
Not all developers though. Those looking for sites to develop are finding themselves competing with Chinese property developers. Julian Heatherich of Savills’ Melbourne says that activity in development sites has become “a lot more aggressive” in the last year, while Lang Walker expressed concerns that Asian groups are paying inflated prices for residential development sites.
According to a NAB survey, investment in Sydney by foreign buyers is falling, but increasing in Melbourne and Brisbane. Other cities don’t get a look-in.
According to Simon Henry, co-CEO of Juwai, stripping out student units, the median purchase price by Chinese investors is A$1.5 million, way above most of the market, suggesting that Chinese buyers cannot be accused of pushing up prices for domestic buyers.
Preferences are for property close to the beach, in well-off suburbs, or apartments close to the centre of major cities, according to the New Daily .
According to property investor Andrew Crossley: “in Brisbane they are looking at Hamilton, Kangaroo Point and Bridgeman Downs; in Sydney they are focusing on Mosman, Bondi and Cremorne; while in Melbourne they are interested in Burwood, Doncaster and Ivanhoe.” He goes on to say that “local investors — those who are buying at the cheaper end of the market — have got more to do with pushing prices up than any foreign interests”.
Clearly, the influence of Chinese buyers is being felt, but in very specific markets; it is not across the board. According to the NAB residential property survey, overseas buyers accounted for 17% of total demand for new properties in Sydney in the September quarter, and almost 25% in Melbourne. Managing director of Momentum Wealth Damian Collins says: “They are buying into new apartments, not existing dwellings, so are not really affecting the residential market.”
The recent free trade deal with China will make it easier for Chinese investors to buy commercial real estate but it doesn’t change the rules for residential real estate. However the federal government is canvassing raising fees from overseas buyers and is considering a $1,500 application fee for every property they buy, from July 2015, said to raise $50 million a year. That implies 33,000 transactions a year, versus the FIRB figure of 5,755 transactions. The announcement seems more to do with being seen to do something about foreign buyers, for political purposes, than a serious revenue raiser.
The other recent political announcement has been the creation of a new visa category , to fast track permanent residency for wealthy foreigners who “invest $15 million in certain assets after 12 months”. Concerns have been expressed that this will drive up property prices, but the actual number of foreigners eligible is not likely to be significant.
The recent release of pre-sales for a new apartment tower in Melbourne, Aurora Melbourne , with 941 apartments, is a development by Malaysian developer UEM Sunrise. After two weeks, 895 units have been sold, 75% to overseas buyers, showing strong demand for new high quality apartment developments in Melbourne. It is the pricing relative to other cities in Asia that is cited as the prime attraction.
“As a benchmark in Australasia, Melbourne core CBD prices are on par with KL, 50 per cent cheaper than Sydney, 200 per cent cheaper than Singapore, 350 per cent cheaper than Hong Kong, and a staggering 550 per cent cheaper than London,” said Raymond Cheah, director of UEM Sunrise in Australia.
While the newspapers carry plenty of headlines about “foreigners driving up property prices”, the reaction tends to be xenophobic rather than factual. Certainly they are having an impact in certain inner city, prime and unit markets but the impact is minimal in most Australian markets.
Linda Phillips is head of research at <a href="https://www.propell.com.au/" target="_blank">Propell National Valuers</a>.
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How much influence do overseas buyers really have?

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Last week the House of Representatives Standing Committee on Economics released their recommendations following their investigation into Australia’s foreign investment framework as it applies to residential real estate. 
The Committee tabled 12 recommendations:
<ol>
<li>The current foreign investment applying to foreign purchases of residential real estate be retained in its current form, utilising the existing legislated prohibitions and restrictions on purchases of established dwellings, and encouraging foreign investment to increase Australia’s supply of new housing. </li>
<li>The Foreign Investment Review Board (FIRB) and the Foreign Investment and Trade Policy Division of Treasury put in place appropriate processes for the purpose of audit, compliance and enforcement of the foreign investment framework.  Such processes must accurately capture audit, compliance and enforcement data for the purpose of oversight of the FIRB and the Australian Treasury. </li>
<li>The government apply a modest administrative fee to the current screening of all foreign purchases of residential real estate, including purchases by temporary residents.  Fees collected should be hypothecated to the Treasury’s Foreign Investment and Trade Policy Division for the purpose of funding audit, compliance and enforcement activities. </li>
<li>
The Government introduce a civil penalty regime for breaches of the foreign investment framework as it applies to residential real estate, with the following features: • Pecuniary penalty orders imposed under this penalty regime to be calculated as a percentage of the property value to act as an effective deterrent; and • The regime to apply to foreign investors and any third party who knowingly assists a foreign investor to breach the framework. Pecuniary penalty orders collected should be hypothecated to the Treasury’s Foreign Investment and Trade Policy Division for the purpose of funding audit, compliance and enforcement activities. 
</li>
<li>The government amend the Foreign Acquisitions and Takeovers Act 1975 to provide that criminal penalties for breaching the foreign investment framework as it applies to residential real estate, apply equally to any third party who knowingly assists a foreign investor in residential real estate to breach the foreign investment framework. </li>
<li>In any instance where a foreign owner divests an illegally held established property, any capital gain from the sale of that property be retained by the government.  Funds collected by this measure should be hypothecated to the Treasury’s Foreign Investment and Trade Policy Division for the purpose of funding audit, compliance and enforcement activities. </li>
<li>Australia’s Foreign Investment Policy be amended to explicitly require a temporary resident to divest an established property within three months if it ceases to be their primary residence. </li>
<li>The government, in conjunction with the states and territories, establish a national register of land title transfers that records the citizenship and residency status of all purchasers of Australian real estate.  This information should be accessible by relevant agencies from a single database. </li>
<li>
The government establish an alert system for the expiry of temporary visas that can be used by the Treasury to issue property divestment orders in cases of non-compliance: • By amending the Migration Act 1958 so that the Department of Immigration and Border Protection must inform the FIRB when a temporary resident departs Australia upon expiry of their visa; and • By establishing effective and timely internal processes at the Treasury to receive and cross-check this information against its property databases to screen for compliance with the foreign investment framework. 
</li>
<li>The government amend the Foreign Acquisitions and Takeovers ACT 1975 to provide that residential property sold under off-the-plan certificates that is marketed for sales overseas, must be marketed in Australia for the same period of time.  Breaches of this requirement should be subject to sanctions under the Act ranging from fines to the cancellation of a sale. </li>
<li>In light of the expected finalisation of the statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 in early 2015, the Committee recommends that the government consider the purchase of residential property by foreign investors as a a possible area of investigation when considering amendments to the legislation. </li>
<li>Treasury’s Foreign Investment and Trade Policy Division make greater use of the databases held by AUSTRAC, and also of other relevant federal and state government databases, to assist the FIRB in its duties and responsibilities. </li>
</ol>
Overall the recommendations are largely within the framework that currently exists, ensuring that foreign buyers only purchase homes which are newly constructed. There are some concerns that the additional administrative fee to screen foreign buyers will act as a disincentive to investment however, reports suggest the fee will only be $1,500. 
In our opinion it is unlikely that such a nominal fee on such a high cost purchase will make a difference.  The introductions for penalties not only for those that purchase non-compliant properties, but also to those that aid such a purchase is also a good step. Any measure that can help to reduce the occurrence of such fraud should be encouraged. 
With the increasing cooperation of state land registries and the development of a national e-conveyancing platform over recent years, the development of a national register of land title transfers that records the citizenship and residency status of all purchasers of Australian real estate is a welcome, important and achievable initiative in order provide increased transparency in relation to foreign investment in real estate through the provision of timely, accurate and reliable data. 
The proposed application of a more severe civil penalty regime to third parties who ‘knowingly assist a foreign investor to breach the framework’ has broad potential application and will be a closely watched development.
It has the potential to extend to real estate agents, banks facilitating the flow of purchase monies from offshore, banks providing mortgage finance and even conveyancers and legal professionals. 
Importantly, the recommendations in the report should not be viewed as a deterrent to continued foreign investment in the Australian housing market, with residential construction activity being a key contributor to Australia’s economic growth, with housing starts in in 2014 now approaching 190,000 units.  
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