Proposals to impose tighter rules on foreign investors in real estate completely miss the main game, according to Master Builders Australia.
Wilhelm Harnisch CEO of Master Builders Australia said there are many serious challenges confronting the residential building sector but foreign investment is not one of them.
“The real issue is the need for less regulation in an overregulated residential building sector,” he said.
Harnisch believes that cutting red tape is critical to improving housing affordability and strengthening the housing sector, not more regulation in an attempt to increase housing stock. The parliamentary inquiry into foreign investment in real estate recommended imposing tougher penalties for foreign buyers who break the rules, which state that non-residents can only invest in new developments to aide housing supply.
“The new rules proposed in the Parliamentary Economics Committee Report into Foreign Investment in Real Estate would fundamentally undermine and dilute the policy reform efforts of achieving a broader range of housing options,” he said.
“The issue of non-compliance by foreign investors is a serious one but this is an issue for better compliance efforts and not increased regulations or fees.
“A serious effort to tackle housing affordability should also include reform of the inflexible industrial relations system which contributes unnecessary costs to the construction of apartments.”