Foreign investment targeting Melbourne’s fringe
Land on Melbourne’s fringe is being rezoned from farmland to residential in an attempt to address Melbourne’s housing affordability yet a recent The Age article uncovered that developers are still looking overseas to attract buyers. The Labor government rezoned and released land as they saw this as the only solutions to the housing shortage and now Victorian residents are again facing inflated prices due to cashed up foreign investors.
Overseas investors, mainly from Singapore, Malaysia, S. Korea, Vietnam and China are slowly turning their focus from inner city apartments, to house and land packages promising of parks, sports grounds, wide footpaths and perfect ‘bungalow’ style family homes being newly build in the outer suburbs. Ads for developers such as Lendlease are littering foreign press with taglines that read “Invest before price increase.” Now locals are competing with foreigners for what is effectively tax-payer owned greenfield land. And this is all within the bounds of the Australian laws.
Currently, according to Foreign Investment Review Board:
“Foreign non-residents will normally be allowed to purchase new dwellings in Australia without being subject to any conditions. There is no limit on the number of new dwellings a foreign non-resident may purchase, but approval is generally required prior to each acquisition.
A new dwelling is a dwelling that will be, is being, or has been built on residential land, has not been previously sold as a dwelling, and has either:
• not been previously occupied; or
• if the dwelling is part of a development (50 or more dwellings) and was sold by the developer of that development, has not been previously occupied for more than 12 months in total.
Developers may hold a new dwelling exemption certificate that allows them to sell new dwellings in the development specified in the certificate to foreign persons. Where a developer has this certificate, the foreign resident may not require a separate approval. The foreign non-resident should ask the developer for a copy of the exemption certificate for the development in which they are intending to purchase. If the exemption certificate covers their intended purchase, they do not need to seek separate foreign investment approval.”
What’s the advantage for overseas investors? Is it to get their children into the Australian education system? Is it pure economics as we continue to see high capital growth? Whatever the reason may be, locals are once again facing price wars in areas where they thought they were safe from extreme competition.
For independent advice on buying or selling real estate, contact Janet Spencer at Buyer Solutions +61 3 9816 8555 or email jspencer@buyersolutions.com.au
Buying property, First home buyers, Home buying, Housing Affordability, Housing Market, Investment, Overseas Buyers
+61 39816 8555