Fallout continues from foreign buyer reforms

Overseas buyers have been forecast to keep snapping up property despite the federal government’s recent crackdown on foreign investors.

The federal government recently proposed to tighten the foreign investment regime by introducing application fees and stiff penalties for illegal purchases.

However, Mal James of James Buyer Advocates said the reforms would have no impact on wealthy buyers, and some Melbourne agencies are now selling up to 75 per cent of their properties to foreigners.

“Do you really think a $10,000 or $20,000 fee is going to bother a Chinese buyer of a $3 million or $4 million home?” he said.

Mr James said the surge in foreign investment has had serious ramifications for local buyers, from first home buyers to seasoned buyers.

“In many cases, we are seeing local buyers almost giving up because the market has changed so dramatically,” he said.

Meanwhile, First National Real Estate chief executive Ray Ellis said the government’s proposed foreign investment reforms had raised false concerns in New Zealand.

“As the Australian dollar falls, more New Zealand citizens are exploring opportunities to invest in Australian real estate, but some are concerned that proposals to increase compliance requirements for foreign investors might affect them as well,” Mr Ellis said.

“Australian and New Zealand citizens have long bought property on both sides of the Tasman.

“The government's policy is that New Zealand citizens are exempt from applying for Foreign Investment Review Board approval when purchasing Australian residential property.”

[Related: Govt claims massive scalp in foreign buyer crackdown]

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