Do new Australian real estate rules discriminate against foreign investors?

Do new Australian real estate rules discriminate against foreign investors?

Do new Australian real estate rules discriminate against foreign investors?

In a move which many believe is political as opposed to financial, the Australian government has this week announced plans to introduce an application fee for foreign investors buying Australian real estate. At a time when the Australian real estate market is going from strength to strength, pricing out local would-be homeowners, there is serious concern for first-time buyers. However, do the new proposals discriminate against overseas investors?

In typical Australian no-nonsense style, the Australian authorities are looking to introduce a $1500 fee per property per investment by overseas parties. These funds will be used to beef up compliance issues relating to Australian real estate and in particular the breaking of rules by foreign investors.

Is the Australian real estate market really so strong?

There has been concern for some time now that domestic buyers in Australia are being priced out of the market, a situation also reflected in the UK. While there are obvious issues which the authorities need to address in order to maintain the support of the Australian public, is the introduction of a $1500 fee for foreign investors the sensible way forward?

Quote from “The Australian real estate market has performed better than many since the 2008 worldwide economic downturn. There are many reasons why Australian property remains popular such as a lack of high-end property, a strong economy and serious interest from the Chinese investment community.”

It is believed that the additional charges will earn around $50 million per annum for Australian authorities although in reality this is a drop in the ocean. The fact remains that if overseas investors believe the Australian market looks attractive then an additional $1500 fee will not put them off. Is this not really just milking the real estate market further while attempting to curry favour with the Australian public?

Free-market principles out of the window?

When the Australian economy was performing well after the worldwide recession which began in 2008, were the Australian authorities concerned about overseas investment? Did they turn away the billions upon billions of dollars invested by the Chinese authorities? Did we see mining companies turned away in favour of domestic operations? The fact remains that the Australian government was very happy for overseas investment to support the economy during the troubled times, including the real estate market, but now that the general public are fighting back, is this nothing but a political knee-jerk reaction?

The fact remains that a $1500 charge is neither here nor there for serious investors who have significant wealth to buy Australian real estate. The idea that these additional funds, estimated at around $600 million over the next decade, will in some way beef up the compliance side of the Austrian authorities is also very difficult to understand to say the least. The Foreign Investment Review Board has been in receipt of powers for some time now to ensure that overseas investments abide by Australian regulations. The fact that there have been very few prosecutions and not one single disinvestment order says everything, this compliance Department is just not working.


Governments around the world have been accused of milking the real estate market as a means of propping up their struggling budgets. The introduction of a potential $1500 fee for foreign investors looking towards Australian real estate is unlikely to impact any decision by foreign investors. In many ways this is simply a scheme to raise more money for the Australian authorities, using the guise of strengthening compliance, while also currying favour with the Australian public.

Will the Australian authorities regret backtracking on a free market?

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