According to the Property Council, this streamlining of approvals will unlock significant new investment in Australian property by removing regulatory burdens that currently hold back global capital.
Property Council Chief Executive Mike Zorbas said the timing of this initiative is crucial for Australia’s development needs.
“Time kills deals, and right now we need as many investment partners as we can find for Australian companies to build the assets our growing cities need,” Mr Zorbas said.
The government will release a consultation paper exploring ways to unlock further global investment into Australia, including automatic approvals for non-controversial investors such as pension funds.
Global institutional investors have played a significant role in Australia’s property market, accounting for 29 per cent of all investment into Australian property over the past decade.
These investors routinely support local businesses in developing new buildings and precincts across Australian cities.
The Property Council highlighted that these international investors often have a better risk appetite for supporting domestic projects, making them valuable partners in Australia’s growth.
“In a time of systemic state debt, we need other people’s money more than ever to build our offices, logistic hubs, shopping malls and much-needed new homes,” Mr Zorbas said.
Despite the federal government’s efforts to attract global investment, the Property Council noted that some state governments are implementing policies that undermine these initiatives.
Victoria’s surcharges on international investors have reportedly resulted in a 53 per cent drop in institutional property investment over three years.
A recent report by Mandala Partners, commissioned by the Property Council, revealed that Victoria now attracts approximately 40 per cent less global investment per capita than New South Wales due to these punitive surcharges.
The report examined how land tax surcharges affect large investors, such as American pension funds that invest in large-scale housing developments, rather than individual overseas buyers purchasing family homes.
According to the findings, eliminating land tax surcharges on global investors nationwide could potentially unlock $8.1 billion in investment, create 8,400 jobs, and increase the country’s GDP by $3.6 billion by 2030.
The Property Council has consistently advocated for streamlining FIRB approval processes and reducing application costs to encourage more investment into Australian cities.
“The Property Council has consistently called for streamlining requirements for FIRB approval processes and application costs to encourage more investment into Australian cities,” Mr Zorbas said.
