TONY Abbott has ordered the Treasury to start issuing divestment orders to dodgy foreign investors who are pushing up house prices in Sydney through illegal purchases.

The crackdown will be directed though an elite audit and compliance unit which will be tasked with finding illegal investments and forcing immediate sales.

In an exclusive interview with the Saturday Telegraph, the Prime Minister revealed that a plan to ease property price pressure in Sydney would be taken to Cabinet within two weeks.

The first measure, which he hinted at in his National Press Club Speech last week, was to start enforcing laws which he claimed had not led to a single prosecution in six years.

“If it comes to our attention that someone has bought a property that they are not legally entitled to buy then our intention is issue divestment notices,” the PM said.

It is currently illegal for non-residents to buy existing homes. But foreign investment is allowed for new dwellings.

Temporary residents are allowed to buy one existing property.

type_quote_start “Not once in the last six years of the previous government were these rules enforced” type_quote_end

However under the scrapping of screening laws by the former Labor government, there is believed to have been a flood of illegal investment which the Reserve Bank has admitted was having an impact on Sydney property prices.

“Not once in the last six years of the previous government were these rules enforced,” Mr Abbott said.

“A succession of Labor treasurers were asleep at the wheel.

“In the next couple of weeks you can expect to see more from us in regards to residential land.n We want housing to be affordable ... we appreciate that if there is illegal competition that is obviously going to make it much more difficult.”

Recommendations from a parliamentary report chaired by Liberal MP Kelly O. Dwyer will go to Cabinet within the next two weeks and are likely to receive approval for criminal and civil penalties for illegal investors and their agents,

It is estimated that around $40 billion a year is legitimately invested by foreign nationals and companies in the Australia residential property market. The value of illegal investment is unknown.