Parliamentary hearing told a lack of housing stock is more of a problem than any particular investor

This article is more than 6 years old

This article is more than 6 years old

Asian buyers are being unfairly blamed by misinformed commentators for pushing up property prices, MPs have been told.

Renewed concerns over foreign investment in housing have been raised against the backdrop of sharply rising house prices in some major cities and the belief among buyers that they are being squeezed out in the bidding process.



But a parliamentary hearing on Friday was told it was more a problem of a lack of housing stock rather any particular investor.



The Foreign Investment Review Board chairman, Brian Wilson, told the House of Representatives economics committee: “I think it’s fair to say almost all the public commentary around residential real estate buying by foreigners has an Asian component to it.



“Very often, where we might get a call that says ‘a Chinese has bought this house and my daughter wasn’t able to do so’ and it’s investigated [we find] yes, they’re of Chinese background but they’re a citizen – they live here,” Wilson said.

"I think quite a lot of the commentary is based upon either lack of knowledge of the facts or an inadvertent misinterpretation of the facts."

He reminded the hearing that about one in 10 citizens or permanent residents had at least one Asian parent and had as much right as anyone to buy a property. He said there were not the same concerns about people of Greek and Italian extraction buying a home.



Australia has about 9m private dwellings. Wilson said there are between 500,000 and 600,000 sales of residential property each year, of which 20,000 might be brought to the attention of the FIRB.



Submissions to the hearing suggested there should be better data to determine the scale of foreign ownership in Australian housing.



"Information is good ... information is not cost-free," Wilson said.

The FIRB has eight staff to deal with foreign investment in residential property. To gain a greater degree of certainty of foreign ownership among the 500,000 plus sales each year would probably require 80 fulltime staff. Wilson questioned whether the government would see this as a worthwhile use of resources.



Housing Industry Association chief economist Harley Dale told the hearing that new-home building was beneficial to employment because it flowed through to other sectors such as manufacturers and suppliers. Foreign investment plays an important role in that expansion of Australia's housing stock.



"There are a larger volume of new dwellings being built in Australia now than would be the case if current [foreign investment] policy settings were more restrictive," Dale said.



Even so, Master Builders Australia's Brent Davies said there was a "serious gap" between the underlying demand for housing – about 180,000 units a year – and the 145,000 being built. It would take 220,000 units a year to narrow that gap.

