12 April 2010
Foreign purchasers can play an important role in supporting the development of new rental properties for Australians, according to the Urban Taskforce.
“Its in our national interest to have a strong supply of housing,” Mr Gadiel said.
“Given that our national undersupply of housing is reaching 200,000 homes, we should welcome any investment by foreign residents or businesses in boosting our supply of newly built housing.
“A renter will not be fussed if their landlord lives in Australia or overseas they just want a home.
“By allowing foreign investors to purchase newly-built housing, more apartment development is made possible, which in turn means more homes available to renters.
“This will help mitigate the strong upward pressure on residential rents arising from our chronic undersupply of housing.”
Mr Gadiel said the Federal Government’s December 2008 changes to foreign investment rules had supported efforts to re-start apartment development.
“Previously, foreign investment restrictions had made it impossible to sell an apartment to a foreign investor once it was tenanted,” Mr Gadiel said.
“Prior to the recent policy change, developers who rent out newly built homes for six or twelve months were barred from subsequently selling the property to a foreign investor.
“This forced some developers to leave properties vacant, rather than lose the opportunities to sell to investors without permanent residency.
“The new rules enable developers to rent out a home for up to 12 months, without losing the right to sell to foreign investors.
“A rule barring developers from selling more than half a development’s new homes to non-resident foreigners was also dropped.”
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
The construction activity made possible by property developers contributes $78 billion to the national economy each year and creates 849,000 direct jobs.