Australia’s federal MPs are about to investigate the impact of Chinese investment in Australia’s property market.
Federal Treasurer Joe Hockey will officially ask the House of Representatives Economics Committee to examine whether the government might need to take a role in policing foreign investment amid fears it is driving up prices and putting property out of the reach of first-home buyers.
The moves follow a Credit Suisse report that estimated Chinese investors are buying around 18 per cent of all new apartments and homes in Sydney, and around 14 per cent in Melbourne.
Victorian MP Kelly O’Dwyer will chair the enquiry, and will hold public hearings in real estate hot spots.
“We need more homes, so foreign investment that increases the number of homes available is a good thing, particularly where it is housing for first-home buyers,” she said.
There are concerns however that the foreign investment is in existing homes as much as new homes. There are also doubts the rules that state temporary residents have to sell when they leave are not being enforced properly.
The Foreign Investment Review Board puts China on top of the list of foreign investors in Australian property, ahead of Canada, USA, Singapore and Malaysia.
RBA Governor Glenn Stevens recently made public comments that it was foreign investment that was driving up prices in Sydney, Melbourne and Brisbane, but he said it was important to keep attracting such investment to stimulate new construction.