Overseas investors looking to diversify their property portfolio may well be exclusively choosing the UK in the future.
- The Australian Federal Government is investigating up to 195 cases of overseas real estate investment
- Under Australian law, international property investors are not allowed to purchase existing real estate
- The UK property market is the destination international investors typically choose to diversify their portfolio
Rules may have been broken in up to 195 cases of real estate investment in Australia.
The Australian property market has offered some of the strongest capital growth in the world over the past year, attracting significant investor attention from overseas.
However, the Federal Government has announced there may have been cases in which foreign investment rules were breached. The law states international investors cannot buy existing real estate, but can purchase off-plan property if it adds to the Australian supply of housing stock.
The news comes after the authorities’ planned crackdown on overseas money amid concerns it was fuelling a dangerous property bubble in the desirable Sydney and Melbourne markets.
A statement from the office of treasurer Joe Hockey said 24 foreign investors have voluntarily come forward to the Foreign Investment Review Board to say the rules may have been breached.
“Another 40 cases relate to referrals from the community where members of the public suspect foreign investors may have broken the rules by using complex structures and illegal leasing arrangements to hide foreign ownership,” the statement added.
The Federal Government has offered a grace period for other investors to come forward in light of the potential rule breach.
International property investment is a popular option for people looking to diversify their portfolios and manage risk.
A significant portion of investors from the Middle East, Hong Kong and South Africa have recently purchased property in the UK – another global market that offers high returns and risk modulation. However, many overseas investors feel very sure about the UK’s regulations and situations such as those occurring in Australia are avoidable.