Sources said the Treasurer could be referring to a recently sold waterfront property called "Windermere" at 25 Ernest Street. Mr Hockey's office would not confirm the address and The Australian Financial Review was unable to get in contact with the owner of "Windermere", Chinese businessman Sam Guo, who has earned the title of the "Chinese Gatsby" for his lavish parties.

"Owners of the houses which are under investigation may not have been notified so we will not comment," a spokesman for Mr Hockey said.

Mr Hockey was explaining the Coalition's crackdown foreign investment laws. Foreigners can only buy new homes, not existing stock.

The Treasurer on Tuesday also questioned the impact of spiralling house prices in Sydney, saying people would not be buying houses if they were unaffordable.

Earlier on Tuesday, Parliamentary Secretary to the Treasurer Kelly O'Dwyer said foreign purchasers included suburban houses as well as luxury homes, contributing to the rise in property prices.

"It's not just for prestige properties. It's for ​properties in suburbs where people may have made illegal purchases and may be having an impact on property prices."

The illegal purchases ranged from $100,000 homes to a $39 million mansion, she said.

As many as 195 unlawful transactions are being investigated and 24 foreign investors have voluntarily come forward under an amnesty to disclose they may have breached home ownership rules.


One of the volunteers who came forward was a British investor who bought a $700,000 property in Western Australia.

In some cases foreign buyers bought multiple properties. One individual is being investigated by the FIRB who was linked to 10 properties ranging in value from hundreds of thousands to over a million dollars.

Illegal foreign home buyers will be forced to sell and the government will capture any capital gain made on divestment of a property.

The 157-year-old "Windermere" is a 3569-square-metre family estate situated on the banks of the Lane Cove River which houses a heritage homestead. At the time of the sale, the property also had a second development approval for additional buildings.

Mr Guo has hosted Chinese celebrities at the property and in January, he had personally knocked on the doors of his neighbours inviting them to his 50th birthday party.

With Misa Han