Australia needs to follow New Zealand's lead and act now on foreign ownership: Patrick Bright

EXPERT OBSERVER

Prospective home buyers beware, Australian real estate prices are likely to escalate further now the New Zealand government has moved to tighten up on foreign ownership.

Australia needs urgently, to follow New Zealand’s example and crack down on foreign ownership or even more Australians will miss out on the chance to own their own home.

The pressure on Australian property prices is likely to increase substantially with New Zealand tightening its foreign investment rules and overseas buyers forced to look elsewhere to invest.

The New Zealand Government has the courage to tackle the issue of housing affordability head on but what about Australia?

You don’t have to be a rocket scientist to work out where these foreign buyers will divert their attention and buying power now that the New Zealand Government has passed new legislation to address this growing problem.

New laws were just passed in New Zealand Parliament this week banning foreigners from buying most types of property after a foreign spending spree has seen prices pushed up and local buyers pushed out.

According to the latest figures from the Australian Tax Office's Agricultural Land Register 13.6 per cent of all Australian agricultural land is foreign owned with the UK and China the largest owners.

Sadly they don’t know how much non-agricultural land is in foreign hands.

It’s important to remember that China alone has more decamillionaires than Australia has tax payers.

The New Zealand Government has clearly recognised the very real threat foreign ownership poses to housing affordability with rates of homelessness in the country among the highest in the developed world.

In contrast, the Australian Government seems to keep fiddling around at the edges rather than addressing the problem head on.

Much of the current generation have already been priced out of the market due to the high number of foreign buyers outbidding Australian citizens in particular over the past decade and this will only get worse unless significant policy changes are implemented.

Australia’s relatively strong economy and consistent capital growth in its major cities over many decades is part of the attraction to foreign buyers and will continue to drive foreign ownership of prime Australian land, both regionally and in the cities, pushing prices even higher.

It is obvious that non-residents eager to buy Australian real estate will do so if you make it easy for them because they see Australia as a stable economy and a safe place to store their money

Patrick Bright is the EPS Property Search director and author of The Insider’s Guide to Buying Real Estate