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Property sector in Australia welcome more foreign investment

Xinhua, April 30, 2015 Adjust font size:

Property Council of Australia Thursday welcomed the foreign investment poured into the country's real estate sector over the last year or so, saying they deliver more jobs and new homes.

The 2013-14 Foreign Investment Review Board (FIRB) Annual Report released Thursday shows foreign investment in the real estate sector had a significant increase, with 74.6 billion (59.6 billion U.S. dollars) approved in the year.

"Foreign investment is helping accelerate much needed new housing supply in Australia and creating jobs in construction," Property Council of Australia said in a statement.

Property Council of Australia Chief Executive Ken Morrison said foreign investment is helping combat a decade of housing undersupply in Australia, which has been the main cause of increased house prices.

"The significant increase in foreign investment into newly constructed housing is very good news for affordability in Australia," Morrison said.

"For more than ten years we have been failing to keep up with demand, falling short by some 11,000 homes on average every year. Sydney alone faces a shortage of 190,000 homes in the coming decade," he said.

"An insufficient number of homes to meet demand just creates upward pressure on prices."

He said the property market is finally "starting to turn the corner" with building activity up to record levels meaning that the supply of new homes is now meeting demand, "even though we are yet to make headway on catching up on the backlog."

"Every newly constructed home that a foreign investor purchases enables up to four other homes to be built, so this boost is good news for affordability.

"The only way to improve housing affordability is to get more housing on the ground earlier, and foreign investment is making this happen."

Morrison also said that foreign investment in real estate helped to create thousands of new jobs in the construction sector, as well as demand for construction materials and services.

"Without foreign investment new projects will come online later or not at all, diminishing supply and meaning that ordinary Australians end up losing out on sources of affordable new housing. "

He said the Property Council "fully supports government action to ensure compliance with foreign investment rules", but would be against the application fees that Australian government proposed to apply on any purchase of property by foreign investors.

The proposed new rules would impose a 5,000 AU dollar (4,000 U. S. dollar) application fee on any foreign investors looking to buy a property under 1 million (800,000 U.S. dollars), rising 10,000 ( 8,000 U.S. dollar) for every extra 1 million in the purchase price. Endi