Foreign investor restrictions could be disastrous: Mark Mendel

Foreign investor restrictions could be disastrous: Mark Mendel
Foreign investor restrictions could be disastrous: Mark Mendel


Federal government plans to restrict foreigners from buying more than half the homes or apartments in any new development will only discourage offshore developers from doing business in Australia.

The proposal pitched as one of a raft of possible measures in the May budget to help young Australians enter the property market would be a waste of taxpayers’ money and potentially disastrous for the economy.

Foreign buyers already faced a wide range of restrictions and fees when it comes to investing in property in Australia.

Enough is enough.

The roll-on effect if this latest proposal is included in the May budget could be an economic disaster for Australia. 

This is just a ploy from the Government to make it look like they are doing something for first home buyers but it will just discourage offshore developers from investing in Australia.

The foreign buyer restriction could be the last straw and could result in driving away foreign buyers investing in Australian property. Excessive surcharges and further restrictions on foreign buyers could also lead to fewer international students coming to Australia as well as a slower population growth and a rise in unemployment.

Most buildings developed by onshore developers rely on local funding which typically limits their sales to foreign investors at 15-20 percent of the total sales.

This was not the first-time foreign buyers have faced a limit on the dwellings they can buy in Australia.

Before 2009, there was a regulation that meant developers could only sell half of their new dwellings in any development to foreign buyers.

But this all changed when the Global Financial Crisis (GFC) hit and the then Labor government decided to abolish the foreign limit for off the plan properties. This meant foreign buyers could buy whole developments if they were marketed both locally and overseas.


Mark Mendel, is founder and chief executive officer of and can be contacted here.

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