Agents have put the national interest first by supporting government restrictions on overseas investment in local real estate.
A parliamentary report on foreign investment that was tabled last week recommended that overseas buyers should continue to be limited to buying off-the-plan properties.
The decision was endorsed by Tracy Yap from Tracy Yap Realty, a Sydney agent who does a lot of business with Chinese investors.
Ms Yap told Real Estate Business that she didn’t want foreign investors to be able to buy established homes because that might then price first home buyers out of the market.
She said that foreign investors are very active in her market of Epping and Eastwood. Overseas activity really started to take off five years ago and has increased every year since, she added.
Morton & Morton managing director Ewan Morton said foreign investment had been good for the Australian real estate industry.
“I think it benefits the wider community because we’re getting new housing stock that is funded by overseas money,” Mr Morton said.
“That’s good for Australia because if we didn’t have access to that money, maybe we wouldn’t get as many new apartments.”
Mr Morton said prices would rise if foreign investors were allowed to compete for established homes – which would be good for vendors but bad for local buyers.
Acton Cottesloe director Bev Heymans also expressed concern at the impact deregulation would have on Australians, even though she said it would make life easier for her as an agent.
She told Real Estate Business that her Perth market hadn’t been performing as well as Sydney, partly because it had attracted fewer Chinese investors.
“Changing the rules [on foreign investment] would give us a boost – and we do need extra buyers, because there isn’t a huge amount of competition,” she said.
“I certainly don’t think it would be bad for the Perth market, but it might have more of an impact on the Sydney market.”
According to the parliamentary report, China was the leading source of foreign investment in Australia real estate in 2012/2013.
China provided 15.8 per cent of the investment, followed by Canada with 13.2 per cent, the US with 11.8 per cent, Singapore with 5.4 per cent and the UK with 4.5 per cent.
New South Wales received 33.3 per cent of housing approvals, followed by Queensland on 22 per cent, Victoria on 21.7 per cent and Western Australia on 11.3 per cent.
The report concluded that foreign investment had played a “vital” role in boosting supply and that it had not distorted the first home buyer market.
“This is because foreign investment levels are not large enough to do so overall and because overseas buyers mainly operate at a different price bracket from first home buyers and buy different types of properties,” it said.