Real estate agents bewildered by forced sale of $39m Sydney mansion

Updated

The forced sale of a $39 million Sydney mansion has left local real estate agents bewildered and prompted concerns about how it will impact the market.

On Tuesday, a Hong Kong-owned business was ordered to sell Villa del Mare within 90 days, five months after it was purchased.

One real estate agent told the ABC that 50 per cent of homes with a harbour view worth over $5 million are now purchased by people of Chinese descent and it is difficult to know if they are Australian citizens or foreign investors.

The palatial mansion on Wolseley Road in Point Piper has sweeping views of the Opera House and Harbour Bridge, and was sold by recruitment entrepreneur Julia Ross to a company called Golden Fast Foods.

But the sale was deemed illegal because Golden Fast Foods is controlled by Hong Kong Property billionaire Hui Ka Yan.

The co-agent for the sale, Bill Malouf from LJ Hooker Double Bay, said the intervention of the Federal Government yesterday left him bewildered.

"We asked [the purchaser] if this was subject to a foreign investment review board ruling but were told it was to be purchased under an Australian company structure," he said.

"We have had no calls from Treasury questioning the sale.

"There were two lawyers involved and a major accountancy firm."

Mr Malouf said he and his co-agent were yet to speak to the purchaser about how he planned to meet the 90-day deadline to sell the property or risk having it repossessed by the Commonwealth Department of Public Prosecutions.

"Putting 90 days on a top-end sale is a bit ridiculous," Mr Malouf said.

"Sometimes it can take 12 or 18 months to sell. It depends who is looking at that level."

Mr Malouf said he did not believe that foreign nationals are playing a role in inflating prices for prime real estate.

"There have been more sales to local Australian buyers. They do not over bid," he said.

"We are now getting a lot of interest from expats because the Australian dollar has dropped."

Another real estate agent, Steven Zoellner of Laing and Simmons Double Bay, had a different view.

"[For] every house worth over $5 million with a view - one in two buyers are Chinese," Mr Zoellner said.

"It is hard to know who is actually an overseas buyer. You only find out if they need to get FIRB (Foreign Investment Review Board) approval.

"The sales we have made have are, as far as we know, to Australian residents."

Mr Zoellner said the surge in interest from Chinese investors had come over the past two years and contributed to a "very slight" increase in eastern suburb property prices.

However Mr Zoelner said low interest rates are the main driver of burgeoning residential property prices.

"Properties below $1.5 million are the most popular and have had the biggest price increases," he said.

Treasurer Joe Hockey told Parliament yesterday that the Government was "very serious about integrity in our foreign investment system".

Mr Hockey and Prime Minister Tony Abbott last week announced a raft of changes to laws that govern the ability of foreign buyers, temporary residents and non-residents, to purchase Australian residential property.

Unveiling the key contents of a consultation paper, Mr Hockey said the proposed measures were designed to restore confidence in a foreign investment review system that had not prosecuted anyone for breaching the rules since 2006.

Mr Hockey made the Villa del Mare order before Question Time on Tuesday after receiving advice from the government solicitor.

"We welcome foreign investment. It is hugely important," Mr Hockey said.

"But it is vitally important that every Australian knows that the rules relating to foreign investment are going to be enforced."

Topics: business-economics-and-finance, housing-industry, point-piper-2027

First posted