More foreign investors have breached laws to buy residential property in Victoria than in any other state, new figures show.

And a growing problem with “front people” has been revealed, particularly elderly Australian citizens buying property on behalf of foreign investors.

Victoria has seen 877 breaches in foreign investment regulations since 2015, according to a report by the Australian National Auditor’s Office discussed in a Senate committee hearing today.

The state makes up 55 per cent of the national total.

Some 18 of the top 20 postcodes for breaches are in Victoria, with Glen Waverley and Box Hill among the Victorian areas to make the top 10.

Education of investors – and “intermediaries” such as conveyancers – was highlighted as an issue, after deputy chair of the Joint Committee of Public Accounts and Audit Julian Hill asked why Victoria was leading the charge.

“A foreign person purchasing a property and then finding out they needed to make a further application [to buy] – that can been seen as a breach,” the principal advisor for Treasury’s Foreign Investment Division, Jessica Robinson, said.

Questions were also raised over why developers, real estate agents or conveyancers were not being fined for breaches, or for not reporting “dodgy deals.”

“We do seek … to make sure that we have an intermediary sector than can assist rather than punish people for a lack of knowledge,” Ms Robinson said.

Nationally, 1067 financial penalties had been handed out for breaches to laws totalling more than $5 million.

There were also 316 forced property sales in the past two years.

The Australian Taxation Office took responsibility for compliance with foreign property investment laws in late 2015.

“Three hundred and sixteen forced disposals is a significant amount of action over two years,” ATO deputy commissioner Mark Konza said.

Mr Hill raised concerns about older Australian citizens buying property as front people and holding it in trust for foreign buyers.

Mr Konza was only aware of one specific investigation into a case he believed involved a front person.

“We looked at prosecuting that person but the person turned out to be someone of limited education, limited language skills and the prospects for litigation were poor,” Mr Konza said.

He said the ATO currently had four other investigations for front people.

The ATO was also checking larger purchases of property and cases where elderly family members appeared to be buying residential land or homes, and making buyers show where their money had come from.