NOBBLED FIRB CREATING RECORD HOUSE PRICES

FIRB IN LIMBO AS FIRST HOME BUYERS ARE FORCED TO CITY FRINGES   

Elephant in the RoomForeign Investment Review Board, under the control of politicians and bureaucrats and not equipped to curb foreign investment in established properties, is forcing housing prices out of reach of local purchasers.

The Australian has revealed that the FIRB had not prosecuted a single investor since 2006 for illegally acquiring property in Australia amid a wave of offshore buying. Australia allows foreign investment in new housing to stimulate supply, but  is supposed to prohibit foreigners from (click on photo to enlarge)   buying established homes in all but a narrow range of circumstances.                                                                           House Economics Committee Report On FIRB                                                     Boom or Bust,  in article 5/8/2014, wrote; Australia is in the midst of a chronic affordability crisis. Housing price inflation has outstripped both rents and household incomes for over a decade, leading to a residential property market considered unaffordable both historically and internationally. Yet, instead of helping to resolve the crisis, Australia’s political class is apparently

…..determined to maintain world-beating prices with poorly but purposefully designed policies to maximise prices.

The public should ask “Are the property holdings of our federal politicians negatively influencing policy and causing them to ignore evidence?” The parliamentary register of members’ interests may help to answer this question, allowing for a summary report of real estate holdings for each Australian federal politician (which may be jointly owned with their spouse). It is evident that politicians are heavily invested in the property game, with the 226 members in both houses of parliament with an ownership stake in a total of 563 properties – an average of 2.5 properties per member, conservatively estimated at around $300 million (563 multiplied by the median dwelling price of $530,000 as of July 2014.

The real total is probably higher considering well-off politicians are likely to purchase real estate in prime suburban and coastal areas above the median (and not all property holdings are residential such as farmland and commercial properties). Property investment is popular across the political spectrum and is a common thread binding

7 Responses to “NOBBLED FIRB CREATING RECORD HOUSE PRICES”

  1. Swann says:

    The toothless Foreign Investment Board has just a handful of employees to monitor and enforce the rules governing investment by foreigners in Australian property compared to the Workplace Gender Equality Agency which has a staff of 38 (35 of whom are women) to monitor and enforce rules governing gender equality.

    • Oxley says:

      They have a staff of only 8 in the Real estate section of FIRB with many of these routinely engaged elsewhere.

  2. Wood Duck says:

    Without first home buyers the wheel will stop turning and eventually there will be no second or third home buyer. Which means speculators will be left to speculate among themselves while the bureaucrats turn a blind eye allowing overseas investors open slather hoping they will continue to prop up the government’s ponzi housing market.

  3. Grafton says:

    The committee’s chairwoman heading an inquiry into FIRB, Liberal MP Kelly O’Dwyer, wanted to know exactly how many prosecutions had taken place.
    “Over time, since the most recent penalties have been in place since 2010, how often have they been used?” she asked Mr Hill of FIRB.
    “We don’t operate at that point very often. In fact it is very rare that we will exercise prosecution activity,” he responded. (Later they were forced to reveal only one person had been prosecuted)
    “We would certainly speak very sternly to the individuals concerned and say that this is a situation we don’t want to continue and we will follow it very closely,” he said.

  4. Boho says:

    30 Nov 2014 — Since the release of the House Economics Committee report, there have been a range of commentators who are either short selling Australia, speaking deceitfully or others with just an irritating deliberate silence. It’s funny you know, I read through the House Standing Committee Economics Report Tabled in House of Representatives, Federal Parliament. I was quite elated initially to have the Petition Submission accepted into the Parliamentary Reporting, so this was a real positive sign. Then without fully digesting the contents thoroughly, I hastily wrote the last news update. Now I realize that while some of the recommendations are a positive step forward, they DO NOT go nearly far enough.
    Excerpt from a statement by Simon Hosking of change.org

  5. Nat says:

    An application fee of $1500, as suggested by Mr Abbott won’t be a deterrent to illegal overseas purchasers, who are currently buying ALL established properties auctioned in Doncaster and paying up to $300k more than the market value of the area, unless it is accompanied by a willingness, on the part of government, to empower the FIRB to investigate and to enforce compliance. The biggest hurdle will be getting the recommendations through both houses of parliament while there are so many vested interests, let alone improving on the committee’s flaky recommendations.

  6. Talford says:

    Local house hunters and first home buyers may have cause to complain about being outbid by the unbridled influx of overseas money, thanks to the FIRB, but the legitimate overseas purchasers “buying off the plan” may have saved Manningham’s Doncaster Hill and its residential apartment strategy from being a complete disaster. The difficulty however, for those who have purchased apartments for higher prices from overseas intermediaries, will face heavy losses if and when they attempt to sell on the local market.
    Talford