Allegations of cut-throat business practices conducted by agents attempting to lure foreign investment onshore have been shot down by prominent real estate executives.
Melbourne buyer’s agent David Morell was recently reported as saying large numbers of Asian buyers are snapping up expensive houses in Melbourne and Sydney by paying up to 30 per cent above market rates.
Chief executive of First National Real Estate and board member of the Real Estate Institute of Australia (REIA) Ray Ellis said there is no evidence to support such an allegation, telling the Australian Financial Review the strength of the property market is what is driving current prices.
McGrath Real Estate executive John McGrath said he has not seen any examples of Asian buyers paying a premium to get into the Australian market and he opposes any changes to current foreign investment rules. Mr McGrath was reported as saying imposing a levy on legitimate overseas buyers is unfair, and warned of possible racist overtones.
"From a cultural point of view we only benefit from overseas residents wanting to invest in our country," he said.
A public inquiry into foreign investment in Australia is attempting to clip the creative means overseas investors are using to skirt the attention of the Foreign Investment Review Board.
The Real Estate Institute of Australia is gearing up to implement an e-Conveyancing platform in order to monitor overseas investments within Australia.
The REIA is concerned the Foreign Investment Review Board is not monitoring regulations and enforcing penalties for breaches – a key driver in the development of the e-Conveyancing platform, especially as 85 per cent of all property transactions over the next two years are to be completed electronically, according to REIA CEO Amanda Lynch.
Ms Lynch said e-Conveyancing will provide the opportunity for easier detection of "irregular activity".
"The platform is heavily regulated with a keen focus on protecting the privacy of individuals; it will be capturing a rich set of data including identification where the transaction involves foreign nationals," Ms Lynch said.
"Lawyers and conveyancers will have to verify the identity of the clients they represent and reflect a client’s foreign residency status while filling the form in an online workspace."