A state-based real estate institute has slammed the federal government’s decision to launch an inquiry into foreign investment, claiming a number of other factors are causing more damage.
The Australian parliament’s Standing Committee for Economics recently launched an investigation into whether foreign buyers are inflating prices and locking locals out of the market.
However, the Real Estate Institute of New South Wales (REINSW) said this focus was ‘misguided’, arguing poor planning and tax policies were inflating prices.
“The fact the government and the media are pointing the finger at foreign investors as the primary reason for increases in property prices and the affordable housing shortage is flawed,” said REINSW president Malcolm Gunning.
“The reason we have a shortage of property in NSW is a convoluted planning system and a tax system that places an unfair burden on property.”
In his view, “clunky” planning laws were blocking an increase in dwelling construction.
Meanwhile, heavy taxes on property sales and the elimination of first home buyer incentives were holding back Australians in the property market.
He said foreign investors were a boon to jobs and economic growth.
“Now is not the time to discourage foreign investment. The inquiry will find that foreign investors help our economy,” he said.
“They support the creation of jobs in the construction industry and other areas like retail."