Australia tightens rules for foreign property buyers

AFP - Saturday, April 24

Australia tightens rules for foreign property buyers

Slideshow: Full Photo Coverage: Business & Economy

SYDNEY (AFP) - – Australia Saturday clamped down on foreigners buying property after complaints that a rapid influx of Asian money had helped make its housing among the most expensive in the world.

The government reimposed tough rules relaxed in 2008 that say temporary residents need permission to buy homes and must sell when they leave, while foreigners investing from abroad can only buy new properties.

The rules are backed by stiff new penalties including compulsory sell orders, as well as expanded monitoring and a crackdown on real estate agents who help foreigners flout the rules.

They follow growing disquiet that ordinary Australians are being priced out of the market after a decade-long property boom that has accelerated over the past year.

"We want to make sure that Australian working families are not being priced out of their own family homes. That is why we have acted in the way in which we have done," said Prime Minister Kevin Rudd.

"We want to make sure that foreign speculators are not going to force up prices for Australians seeking to buy their own home, buy their first home and we think this is the right course of action."

House prices have been red-hot in Australia's major cities, especially Sydney and Melbourne and also Perth, centre of the country's booming minerals exports to Asia.

Victoria state, whose capital is Melbourne, smashed the billion-dollar (925 million US) weekly sales barrier in March, while Rupert Murdoch's son Lachlan landed a record 23 million dollar property at a Sydney auction in November.

An international survey released in January found Australia's housing was the least affordable among six advanced nations including the United States, Britain, Canada, New Zealand and Ireland.

Australia's opposition has said foreign investors are outbidding locals at house auctions, while media reports refer to cashed-up Asian buyers snapping up homes for their children studying in the country.

However experts also blame a lack of housing supply and say government hand-outs, including grants for first-time buyers, have inflated prices.