HomeUnion Investment Properties revealed that recently the Federal Government has been conducting an investigation regarding 195 cases of real estate investment funded by offshore investors. The 195 cases were said to have breached the rules regarding residential properties.
It was noted that the Federal Government has issued a statement regarding their plans on putting a stop to the rogue investors from other countries despite the buzzing rumors that the agency is the one responsible for the property bubble particularly in cities such as Melbourne and Sydney. A month after the statement, the Federal Government has widened their investigation of all foreign investors in the Australian market.
Because of the foreign investment law, foreigners are not allowed to buy any residential properties listed on the market but they are allowed to help increase the housing supply in the country by acting as investors in new housing projects. The office of the treasurer has also released a statement regarding the issue of the 195 cases. They disclosed that out of the 195 cases, 24 of the foreign investors has already reached out to FIRB or Foreign Investment Review Board and confessed that they indeed broke some investment rules.
Though it was not revealed how much the sum total of all the properties that are under investigation, it was stated that some of those properties are included in the prestige market while some are located in the suburbs of some capital cities.
According to Ian Verrender, locals are so fast to point out that the Chinese investors are the reason why the housing prices continue to rise but the real reason why this is happening is because of the local investors.
One of the cases currently under negotiation is between a British investor and FIRB. They plan to end the case as voluntary divestment after the British confessed that he has purchases a property located in Western Australia for around $700,000. If the case is ruled as divestment, this will be the second similar case since March.
The Government is also planning on giving tougher punishments especially for those investors who divested an illegally bought property and then make a huge profit out of it. The punishment will be a civil penalty to make sure all capital gain is captured back.