The Property Council of Australia has warned its government against overtaxing lawful foreign investment in new housing, arguing that such a move could significantly worsen housing affordability for all Australians.
The Property Council outlines its assessment in its submission on the federal government’s 2015 Options Paper, called Strengthening Australia’s Foreign Investment Framework.
“If the government proceeds with introducing new fees on foreign investment that are excessively high it risks making the already acute problem of housing affordability significantly worse,” Property Council chief executive Ken Morrison says. “Imposing an unjustifiably high new fee will deter foreign investors and drive away the capital developers rely on to get new housing projects off the ground.”
Pointing out that development companies in Australia rely on foreign investment for around 20% to 25% of their multi-residential pre-sales, Morrison adds: “If you take this away you threaten the viability of new projects and the houses and the apartments they deliver onto the market for Australians to purchase. This is turn means less new housing stock coming onto markets where demand already far outstrips supply, driving prices up.”