The focus on foreign investors and the idea they play a “negative role” in the Australian property market is misguided, according to the Real Estate Institute of New South Wales.
REINSW President Malcolm Gunning said the decision by Treasurer Joe Hockey to investigate foreign investment via the House of Representatives Economics Committee will find other forces at work.
“The fact that the government and the media are pointing the finger at foreign investors as the primary reason for increases in property prices and the affordable housing shortage is flawed,” Mr Gunning said.
“The reason we have a shortage of property in NSW is a convoluted planning system and a tax system that places an unfair burden on property,” Mr Gunning said.
“Certainly bringing anyone extra into a stressed market is going to bring its problems but foreign investors are not at the heart of the real issue.
“The government has created a situation where foreign investors are being encouraged to buy new property and therefore they are competing against the first homebuyer. It’s time to give the first homebuyer a break and stop pitting them against foreign investors and those who are purchasing properties to fund their retirement. Bringing back the incentives for first homebuyers to purchase
existing properties can do this.
“Now is not the time to discourage foreign investment. The enquiry will find that foreign investors help our economy. They support the creation of jobs in the construction industry and other areas like retail.
“Everyone benefits from a stronger property market. Now is not the time to point the finger at foreign investors, Australia needs them.
“Let’s fix the flaws in the system that created these problems, the clunky planning laws that are slow and outdated and the overtaxing of property, rather than blaming an easy target,” Mr Gunning said.