Friday, 28 November 2014

Whilst not all commentators are wholly supportive of all of the key findings and associated recommendations of the Committee, there appears to be a general consensus that data on foreign investment, particularly in the residential market, is poor and needs improvement.

The Committee’s remit was to examine:

  • the economic benefits of foreign investment in residential property;
  • whether such foreign investment is directly increasing the supply of new housing and bringing benefits to the local building industry and its suppliers;
  • how Australia’s foreign investment framework compares with international experience; and
  • whether the administration of Australia’s foreign investment policy relating to residential property can be enhanced.

After conducting six public hearings and reviewing in excess of 90 individual submissions, the Committee made four key findings:

  • There is currently no accurate or timely data that tracks foreign investment in residential real estate;
  • The FIRB is unable to provide basic compliance information about its investigations and enforcement activity, reflecting poorly on its administration;
  • An inability or unwillingness to meaningfully enforce the existing rules has made it is less likely that people will comply with those rules;
  • The above issues have potentially arisen due to underinvestment in FIRB’s audit, compliance and enforcement activities, funding for which could be boosted by adoption of a ‘user pays’ system.

The Committee’s report then makes twelve separate recommendations to improve FIRB operations.

A copy of the full report is available here. 

If you wish to discuss the findings of this report with one of our real estate or investment managers please contact our senior advisors below.