Housing - What is it costing Australians?

Thursday, July 04, 2013

Many Australians are finding it more and more difficult to own their own homes due to escalating costs and not being able to get out of the rental market. 

Both the Labor, Liberal and National Governments have encouraged foreign investment, even to the detriment of Australians owning their own homes. We are told often enough that foreign investment is good for a country. Governments encourage foreign investment because of the revenue it brings. 

There are guidelines for temporary residents and foreign non-residents purchasing real estate property in Australia; they must apply to the Foreign Investment Review Board before purchasing.

Below is the guideline. You can click on the website for further information.

A temporary resident is a person who is residing in Australia and:

  • holds a temporary residency visa which permits them to stay in Australia for a continuous period of more than 12 months (regardless of how long remains on the visa); or
  • has submitted an application for permanent residency and holds a bridging visa which    permits them to stay in Australia until that application has been finalised
Temporary residents may acquire one established dwelling only and it must be used as their residence in Australia.
Temporary residents need to apply if they wish to buy an established dwelling. These applications are normally approved subject to the condition that: 

  • the property is vacant at settlement;
  • the property is used as your principal place of residence;
  • no part of the property is rented; and 
  • you sell the property when it ceases to be your principal place of residence (the earlier of when you no longer reside in the dwelling or you depart Australia). 

All Foreign Non Residents Are Required To Notify FIRB of Any Proposed Acquisition of Residential Real Estate.
Foreign non-residents or short term visa holders can invest in Australian real estate only if that investment adds to the housing stock. This generally occurs by acquiring new dwellings, off-the-plan properties under construction or yet to be built, or vacant land for development. Non-resident foreign persons cannot buy established dwellings as investment properties or as homes.

Are these guidelines adhered to and what practices are in place when someone purchases a property?

One Nation proposes that at the time of purchase and signing the contract the sales agent (or if a private sale the solicitor handling the conveyancing) must sight documentation of the purchaser being an Australian citizen by way of Passport or birth certificate, which would be noted and signed on an appropriate form. 

If a temporary resident or foreign investor purchasing property, approval from the Foreign Investment Review board must be attached to the contract. 

Under the guidelines temporary residents must sell the property when it ceases to be your principal place of residence (the earlier of when you no longer reside in the dwelling or you depart Australia). 

What guarantee do we have that foreign students (parents or family) who have purchased property, still own the property after the student no longer resides at the premises or left the country? 

What guarantee do we have that foreigners are not buying established dwellings?

The Foreign Investment Review board should be working with the Immigration department and the realestate industry. The point here is, if housing is illegally bought or held then it depletes the housing market for Australians.  This may well drive up the price of housing, making it unaffordable for first home buyers. 

How many properties in our cities do foreigners own illegally? I would advise Australians to report anyone who they suspect may have purchased a property outside the guidelines of the Foreign Investment Review Board. At the end of the day it may make enough of a difference for Australians to own their home.     



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