Amid growing calls for new controls on foreign real estate investment in the heated property market, the Property Council of Australia has claimed that introducing new controls on foreign investment would be “counterproductive”.
Property Council national president and chief executive of DEXUS Property Group Darren Steinberg says there is “no factual basis” justifying intervention in the commercial property sector.
"We need to remember that the property and construction industries employ 1.3 million Australians, account for 1.5 per cent of GDP and contribute $34 billion in real estate specific taxes. We don't want to put this at risk."
conducted by the Reserve Bank of Australia shows that foreigners accounted for around one-quarter of the value of commercial property purchases in Australia since 2008, up from one-tenth in the previous 15 years.
Steinberg says that gearing levels in commercial property are under control and that policy makers should look before they leap on foreign property investment controls.
"Average gearing for major AREITs excluding Westfield sit at around 29 per cent and the make up of that debt is roughly 50:50 between the banks and debt capital markets. This is a far better position than in 2008 and one of the lowest in the sector's history," he said.
"There is no justification for new taxes or controls on this sector."