Australia Orders More Foreign Homeowners to Sell
Source: wsj.com
Treasurer Joe Hockey vows to boost penalties as investigators probe 462 possible breaches by foreign home buyers
Several foreign owners of residential property across Australia have been ordered to sell as the government intensifies its crackdown on the abuse of homeownership laws by buyers from China and elsewhere.
Treasurer Joe Hockey said foreign investors have been ordered to sell six properties in the cities of Sydney, Brisbane and Perth. The homes are valued between 152,000 and 1.86 million Australian dollars (US$112,768 and US$1.38 million).
The orders could be the tip of the iceberg, with Mr. Hockey revealing probes have unearthed 462 possible breaches of foreign homeownership rules after the government ramped up its spending on enforcement in its May budget. The number of cases being investigated has more than doubled since the last estimate was given in June.
The treasurer said he expects more divestment orders will be announced soon, and promised to increase penalties for those who break the rules.
With skyrocketing house prices putting homeownership out of reach of many Australian citizens, the conservative government is under pressure to make housing more affordable, and rein in surging investor buying that some fear may push the market to unsustainable levels, causing a crash as the economy slows at the end of a long mining boom.
The worry is that money from places such as China and Southeast Asia is fueling the housing problem. In April, Australia’s Foreign Investment Review Board said China had overtaken the U.S. as the country’s biggest source of investment from overseas, with a total of A$27.6 billion last year. Real estate accounted for almost half of the money.
In March, the treasurer said he had ordered a Hong Kong-based buyer of a A$39 million Sydney mansion to sell the property after investigators said it was purchased illegally.
The latest divestment orders relate to properties owned by five investors from four countries, including China. Some had purchased property with Foreign Investment Review Board approval, but their circumstances changed and they failed to comply with divestment requirements, Mr. Hockey said. Others broke the rules at the outset by purchasing a property without approval, he said.
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