- Amending existing planning laws by providing the supply of more new land to build new houses and
- Amending Foreign Investment Law to restrict temporary residents and non-residents by not allowing them to buy new houses in
As we know that the pillars are the strength of a building, so self-sufficient young citizen and properly settled new migrants in our community are the strength of our nation’s economy.
If young citizens and new migrants can afford housing, which is their fundamental right, with their amount of average income, they can spend some money to develop themselves and to other members of the family unit, then it will be beneficial for our Government as well to save some money in community development.
We understand that foreign investment helps to grow our economy. But Australia is for Australians. So Australian people deserve priority to live in affordable housing first and after meeting the demand of Australian people, if there is any surplus, then we can think of allowing foreign people to invest in Australian real estate subject to eligibility. Any foreign citizens who have an existing business in Australia, which is helping our economy and local jobs, may be allowed to buy one house as a residence.
In Foreign Investment Law it is stated that the purpose of foreign investment is to help build Australia’s economy and will continue to enhance the well being of Australians by supporting economic growth and prosperity, to support existing jobs and create new jobs and to encourage innovation.
I believe that the above purpose as set out in the Foreign Investment Law is not appropriate in the Real Estate industry in this point in time.
In Foreign Investment Law it is also stated that the Government favors diversity of ownership within Australian industries and sectors to promote healthy competition.
We do not understand how the Government is bringing the diversity of ownership to promote healthy competition in the real estate industry. Most of the successful buyers in our real estate market are temporary residents and non-residents. Although they have lot of money to invest, they have no concern about our current market prices of housing. So they can easily buy any eligible property at any cost. Australian local buyers cannot afford to beat overseas buyers as they obviously have more money than us. As there is no limit for overseas buyers, they can buy as many properties that come on the market.
Australia is a country of multiculturalism. We do not need to invite foreign investment in the real estate industry to promote diversity of ownership and healthy competition.
As the Government allows non-residents and Temporary Residents to invest in our real estate which is the fundamental needs of all Australians then we can say that we are discriminating to our domestic first home buyers, especially our adult young Australian born citizens and new migrants from various parts of the world who have chosen Australia as their home.
We are providing factual evidence of the investments made by the Foreign Investor in the different industry sectors within Australia in 2013-2014:
Table: Total approvals by industry sector in 2013-14
|| Number of Approvals
||Proposed investment $b
|Agriculture, forestry & fishing
|Finance & insurance
|Mineral exploration & development
Source: Foreign Investment Review Board Annual Report 2013-2014.
As shown in the above table, the Real Estate Industry had the highest (44.6 % ) out of all Australian Foreign Investment.
We can also see that the real estate sector had a significant increase in approvals in 2013-14, with 23,428 approvals was worth $74.6 billion, compared with 12,025 approvals in 2012-13 was worth $51.9 billion.
So we can see from the above table that there is a tremendous investment in real estate compared to other industry investment. This is jeopardizing the first home buyers to afford their dream home in their own country.
To bring social justice in the housing industry for all Australians, we recommend a few amendments in Foreign Investment Law which we can apply in NSW and Victoria first:
- Restrict Temporary residents and Non-resident :
- from buying established dwellings for redevelopment (that is, to demolish the existing dwelling and build new dwellings).
- from buying brand new dwellings .
- from buying vacant land for residential development.
- Restrict giving pre-approval to those developers who sell new dwellings in temporary overseas offices, to foreign persons regardless of their citizenship or residency, without giving priority to Australian
- Allocate enough funds in the budget to provide more opportunities to low income earners and new migrants to buy their first home and
- Advise the Australian Competition and Consumer Commission as soon as possible to examine competition issues in accordance with Australia’s competition policy
It is also our Government’s responsibility to look after all Australians and make sure that foreign investments are not contrary to the national interest.
NSW and Victoria are very expensive places in the world at the moment to live and settle. Everything here is very expensive compared to other cities in the world and this is due to the non-residents being allowed to invest. Because of their high level of interest in our real estate industry, wealthy overseas investors spend money in the Australian housing industry and this is jeopardizing our local low and standard income earners such as young adult Australians and new migrants to buy their first home
Hence we urge our Government to amend The Foreign Acquisitions and Takeovers Act 1975 and
block any proposals in Real estate where appropriate as we believe that it is the contrary to the national interest at the current circumstances in real estate industry and also to take other necessary steps to resolve these issues to provide low and average income earners such as young adult Australians and new migrants, the opportunity to afford their first home by creating such an environment through legislative amendments in Foreign Investment Law and other relevant laws.
We believe that this is the Australian way to look after our own people first. This is a fair go for all Australians.
NSW and Victoria should be the first place or starting point to apply those amendments.
Author: Farid AHMED, Marrickville, NSW M: 0402222211
[vc_row][vc_column][vc_column_text]Foreign buyers are crowding out domestic buyers in the Australian Real Estate Market
Housing affordability is one of the biggest issues facing our Australian people and we are finding it increasingly difficult to buy our first home as prices continue to skyrocket in our major capital cities, especially as it is becoming beyond the reach of the low and average income earners, such as young adult Australians and new migrants, in most suburbs of NSW and Victoria.
The average Australian’s weekly net income is between $700-$950 and currently it is not possible for single income earners to afford to buy their home or even rent a home in Sydney, Melbourne and close surrounding areas. It takes more than 60 per cent of their weekly income out of their pocket. If more than 60 per cent income goes out of their pocket in housing, how can single income earners afford to smoothly deal with the family expenses on such a small remainder of income?
Also housing affordability is virtually ignored in the Budget and the Government doesn’t attempt to address any real problems in our economy.
We are hoping to see reforms in the Foreign Investment Law and encourage State Government to amend Planning Laws to supply new housing for all Australians so that our young adult citizens and newly migrated people from various ethnic backgrounds in the world can afford it.
In fact, we found that the supply of land is less than the demand. In order to overcome this situation, I am proposing some recommendations to make affordable housing for low and standard income earners and new migrants.