Don't blame foreign investors, look closer to home for real issues: REINSW

Don't blame foreign investors, look closer to home for real issues: REINSW
Don't blame foreign investors, look closer to home for real issues: REINSW

Blaming foreign investors for playing a 'negative role' in the Australian property market is misguided, according to the Real Estate Institute of New South Wales (REINSW).

REINSW president, Malcolm Gunning, said that the decision to investigate foreign investment by the government will find other forces at work closer to home.

“The fact that the government and the media are pointing the finger at foreign investors as the primary reason for increases in property prices and the affordable housing shortage is flawed,” Gunning said.

“The reason we have a shortage of property in NSW is a convoluted planning system and a tax system that places an unfair burden on property,” he said.

He conceded that bringing anyone "extra" into an already stressed market will bring problems, but said that foreign investors are not the heart of the issue.

“The government has created a situation where foreign investors are being encouraged to buy new property and therefore they are competing against the first home buyer. It’s time to give the first home buyer a break and stop pitting them against foreign investors and those who are purchasing properties to fund their retirement. Bringing back the incentives for first home buyers to purchase existing properties can do this," he said.

“Now is not the time to discourage foreign investment. The enquiry will find that foreign investors help our economy. They support the creation of jobs in the construction industry and other areas like retail."

These sentiments were echoed by John McGrath last night on A Current Affair's delving into foreign investment; however the report also noted that the "flood of foreign investment in Australian properties" was largely not towards properties competing with first home buyers, noting that some of the properties are "so exclusive they aren't even advertised in Australia".

The report referred to foreign buyers as "cashed up and ready to spend" to "trade up for our surf, sun and Aussie way of life".

Comments on the A Current Affair homepage about the report largely were against foreign investment in the country.

"I say put a stop to it. They pool their money and buy buy buy. How is the normal everyday Australian supposed to buy properties these days, when the overseas people both here and abroad join together to buy Australia out. Time a stop was put to it. They also come here and live two and three families in one house while they buy another one, then they put two or three families in that one, and so on and so on. Or they come here and have a couple 'wives', one legal and the others pretend wives and breed like their is no tomorrow," one comment said.

However, Gunning urged that everyone benefits from a stronger market.

“Now is not the time to point the finger at foreign investors, Australia needs them," he said.

“Let’s fix the flaws in the system that created these problems, the clunky planning laws that are slow and outdated and the overtaxing of property, rather than blaming an easy target".

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Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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