Tarbey critical of foreign investment crackdown

Tarbey critical of foreign investment crackdown

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Most agents support foreign investment in local real estate, although one prominent identity is warning they may fall foul of new rules.

A recent Real Estate Business poll found that 55 per cent of respondents thought foreign investors were good for Australia because they boosted housing supply and market activity.

However, another 37 per cent of agents blamed foreign buyers for driving up prices for local buyers, while 8 per cent said they were neutral.

Century 21 chairman Charles Tarbey said he supported a recent federal government proposal that could result in fines or jail time for agents who help foreign buyers flout investment rules.

“I think it’s very acceptable, if that's what the rule is,” Mr Tarbey said. "If it's all about making a sale, it can be pretty dangerous.

“The thing is, there are plenty of investors in Australia who will pick up property right now; you don't need overseas investors to help pick up what’s left of the real estate market, or the supply chain in the best capital cities.”

However, Mr Tarbey said many agents would be unaware of the rules regarding foreign investment in residential real estate and could fall victim to unscrupulous buyers.

“If somebody wanted to cover their identity they could probably cover it significantly enough for an agent – who’s even gone to the next level of company search and the second company search – to still not find out who's behind that purchase,” he said.

Mr Tarbey also said the Foreign Investment Review Board’s recent high-profile crackdown on the investor who bought a $39 million Sydney mansion could disguise a poor track record on enforcement.

“My view is that there are a significant number of people who bought properties potentially out of line with our FIRB rules many, many years ago, who have had significant capital gain since because of the Sydney market,” he said.

“Why not attack them? They're the ones the FIRB should be targeting, because they've had the gain, they've had the opportunity – you target the last person who comes in with a high profile and think that you're going to stop things?”

[Related: Rules being breached with impunity, says REINSW]

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