"no policing" of foreign investment in australia

Sydney Harbour Photo: Wikimedia Commons

Foreign investment remains a controversial issue in Australia, as demand from overseas surges, sparking suspicion of illegal purchases. But new reports reveal that there is no government agency routinely policing the law.

Last year, proposed foreign investment in Australian property doubled to $34.7 billion, according to the latest statistics from the FIRB, which were published earlier this year. China led demand, with $12.4 billion of proposed investment, double that of the USA.

In response, the government announced a series of new laws designed to crack down on potential illegal purchases of property, leaving unauthorised buying of real estate by non-residents subject to Fines and possible prison sentences.

New reports from Australia's Sunday Telegraph, though, reveal that while foreign investors should seek approval from the FIRB, no government agency routinely checks whether they have done so.

At the same time, there is no regular checking of registrations with FIRB against the list of actual property purchases. While the FIRB publishes annual figures showing how many applications are approved - and their value - it does not record figures for completed sales. Indeed, there is a "substantial difference" between proposed and actual investment.

Malcolm Gunning, President of Real Estate Institute of NSW, an agency that serves Chinese buyers, tells the paper: "We have never been contacted by any government agency. We ask foreign buyers the question if they have FIRB approval but it’s not up to us to police it."