The operator of a Chinese-language real estate website says the Foreign Investment Review Board crack down on illegal property buying is “racist” while Ray White Real Estate chairman Brian White urged calm in response to fears Chinese buyers are pushing up prices.
“Yes I think the targeting of Chinese buyers is racist and it threatens to harm the attractiveness of Australia as an offshore investment destination,” Juwai co-chief executive Simon Henry said.
He said the momentum to crack down on foreign property ownership just wasn’t there until about three years ago when China overtook the United States as the biggest foreign buyer of Australia residential real estate.
“Proposed law reforms in the mix at the moment have been put out in response to sensationalist headlines about Chinese buyers pushing up prices without the data to support them,” Mr Henry said. Juwai.com is an Australian-owned business that operates in China, advertising property in 60 countries.
Mr White has not seen any evidence of endemic levels of illegal foreign buying and noted his concern that many anecdotal stories are based on “sloppy” sources that often wrongly confused Australians of Asian descent with foreigners.
“This is a complex issue with implications not just for foreign buyers but Australian investors also,” Mr White said. “Australian nationals bid through a nominee for all sorts of legitimate reasons, including a preference to work through a buyers agent or a desire to keep the sale out of the press if they are a celebrity or business person wanting to keep their name off the BRW Rich List,” Mr White said.
Real estate agents do not have any legal obligations to check that potential buyers meet the appropriate citizenship or residency requirements to purchase a property. If a bidder in a sale or auction is successful, then it is the legal responsibility of the conveyancer on the transaction to ensure the buyer is eligible under the law.
It is unclear whether the government’s proposal to introduce a national register for residential property transactions aimed at tracking foreign buyers would mean new obligations for real estate agents. Mr White said he has written to Treasury seeking clarification on this matter and is still looking forward to a response.
It is an established part of the Australian real estate industry that potential buyers can make bids anonymously through a nominee, with them only required to provide their full details at the conveyancing stage if their bid is successful. Concerns have been raised previously that this is one common way illegal foreign buyers are avoiding attention.
Ray White opened its first Beijing office last year.