Foreign investors buying homes illegally in Australia could face penalties of over $600,000, in one of the first big tries by the government to slow the rising costs of home within the country.
“What we want to do is ensure that illegal foreign investment is not unnecessarily driving up prices,” Prime Minister Tony Abbott said on Saturday. “If you don’t play by the rules there will be a tough penalty regime in place, and those penalties will be enforced.”
The policies will ensure that prospective overseas buyers can only purchase newly-built homes, and require the approval of the Foreign Investment Review board to acquire the property; Third parties who acknowledge violations and are complicit with them can be punished as well.
A report by Demographia released in January said, after Hong Kong and Vancouver, Sydney is the third least affordable housing-market in the world. The cost of housing in Sydney increased 15 per cent since last April, and 11 per cent in Melbourne, according to CoreLogic RP Data. The data also suggested the median dwelling price in Sydney was $732,500.
The policy was discussed on Australia’s The Today Show by Ross Greenwood, and he referenced Vancouver’s housing market. Since then, there has been discussion on twitter: Does Vancouver need to consider Australia’s solution to stall housing prices?
— Hamish B (@hamishrb) May 4, 2015
Australia Stiffens Penalties Against Foreign Property Investors http://t.co/8ctzGfE2If is this what Vancouver should consider?
— Vero Best (@vero360) May 3, 2015
This seems a bit extreme and could make Vancouver real estate more attractive to foreigners. https://t.co/kenNkL1jOg
— Tony Iannetti (@tonyiannnetti) May 4, 2015
The influence of foreign investors on the housing market of Vancouver has been a hot topic for years; Vancouver Mayor Gregor Robertson announced an Affordable Housing Agenda with Vision Vancouver last fall, which looks to add up to 4,000 rental suites to the city.