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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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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jrichardson-uRX5hFdKfN

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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LindaPhillips-Aic2YD9SM3

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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