Buying property in Australia is now harder for foreign investors.
People emigrating to Australia will now find it more difficult to buy Australian property as Australia tightens the rules on foreign property purchasers.
As we reported last month, prices in cities such as Sydney and Melbourne were rocketing due to Asian buyers flooding the market. Some Melbourne properties were going for a record $30 million AUD. Many estate agents around Sydney and Melbourne were capitalising on the Asian interest by specifically targeting Chinese buyers.
However the Australian government got involved after concerns that local Australians were being priced out of the property market. Prime Minister Kevin Rudd announced: “We want to make sure that foreign speculators are not going to force up prices for Australians seeking to buy their own home, buy their first home and we think this is the right course of action.”
That course of action is to reimpose tough rules about what type of property foreigners can buy – the rules were relaxed in 2008 to encourage foreign investors and to help lift the property market. Temporary residents now need permission to buy homes and if they decide to leave Australia, they cannot keep the property, they must sell it on. Foreigners investing from abroad will be limited to buying only new properties.
Penalties will ensure compliance with the rules, these include compulsory sell orders and a crackdown on estate agents who target foreign buyers whilst ignoring the rulings. Strict monitoring of estate agents and foreign buyers will ensure that targets are being met.
A recent survey revealed that the Australian housing market is now one of the most expensive in the developed world along with the US, Britain, Canada, New Zealand and Ireland.
These tough new rules will have minimal impact on those looking to emigrate to Australia permanently as they largely affect foreign investors. If you are thinking of living in Australia and are concerned about how the rules affect you, look at our guide to buying property in Australia.
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3 Responses to “Australia Tightens Rules on Foreign Property Investors”
Comment by Dave — April 25, 2010 @ 11:17 am
I hope something is seriously being done, I cant buy my first property in any decent proximity to the city because of these nuisances….and I’ve worked hard all my life for what I’ve saved up – my parents arent buying for me like them. They are rampantly taking over.
Comment by Ex Aussie — April 25, 2010 @ 8:39 pm
I was in Australia in 1989 when home loans were at 21% interest rates. Not tax deductible either. Jobs paid much less thab the US with taxes twice as high.
Used to be 17 million people and a huge amount of land. So why are prices so high? Because its every man for himself. Same curse as the US where people will sell the away the good future of their own children.
Comment by Ex Aussie — April 25, 2010 @ 8:48 pm
Forgot to say: no worries mate – she’ll be right (as they make off with THEIR booty).
Young Australian need to move to cites where they can afford to live (thanks mum and dad). In the US we are running out of land, so nothing left to exploit except workers retirement accounts. Can you say Wall St where ALL the politicians have been paid-off.
Welcome to the wonderful life chasing materialism.