Tony Abbott suggests foreigners pricing out young home buyers

Prime Minister Tony Abbott today said he wanted to enforce the Foreign Investment Review Board (FIRB) residential rules "because, obviously, the last thing we want to be doing is pricing young home buyers out of the market".

He told Alan Jones on 2GB that Kelly O’Dwyer, as the chairman of a parliamentary committee was looking at the fact that the former Labor government never enforced the prohibitions on foreign purchasers of existing residential properties.

"Now, what sort of a government has rules and never actually enforces them?" he said.

Tony Abbott foreshadowed within a few weeks his government would be putting the policy that he took to the election into action.

The Australian Financial Review wrote earlier this week the government’s response to the ­parliamentary report on the issue was discussed by cabinet on Tuesday and Wednesday. 

“There has been evidence which will emerge over time that there has been a significant increase in the number of foreigners buying Australian residential real estate unlawfully,” Treasurer Joe Hockey told Fairfax Radio.

“It hasn’t been enforced because it never was enforced under the previous government... You’re about to see that change.”

A parliamentary inquiry led by Liberal MP Kelly O’Dwyer, who was recently promoted to Parliamentary Secretary to the Treasurer, handed in its report to the government last November.

The report actually found that foreign investment was, on the whole, of benefit to the country and was not the main cause of any recent steep increases in property prices.

It did, however lash out at the FIRB fair failing in monitoring and enforcing the laws.

There have been no prosecutions made against foreign buyers for illegal residential property purchases since 2006.

One of the inquiry's key recommendations was the creation of a national register linking records of land transfers with citizenship and migration residency status, to better track of foreign investment.

The government’s moves on foreign investment in real estate were heralded in ­Tony Abbott’s speech to the National Press Club last Monday.

“I am a friend of foreign investment but it has to come on our terms and for our benefit,” Abbott said.

Australians were "anxious" about the country's economic sovereignty, especially foreign purchases of agricultural land," Mr Abbott said.

"And better enforcement of the rules against foreign purchases of existing homes so that young people are not priced out of the market."

The national initiative will rely on state government co-operation in amending transfer purchase documentation.

Property Observer gleans all states, barring South Australian, have agreed to the federal government's wishes.