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Australia to step up probes in to illegal foreign home buyers

Thursday, March 5, 2015 - 07:25
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Australia will be beefing up investigations into foreigners illegally buying residential properties, Treasurer Joe Hockey said on Wednesday, in a move seen as an attempt to cool one of the world's hottest property markets.

[SYDNEY] Australia will be beefing up investigations into foreigners illegally buying residential properties, Treasurer Joe Hockey said on Wednesday, in a move seen as an attempt to cool one of the world's hottest property markets.

The announcement came a day after Australia ordered the Chinese owner of a A$39 million (US$31 million) Sydney mansion to sell up within 90 days to sell the property or face legal measures.

Australian property has long been a popular choice for Chinese money but investments appear to have accelerated in the past year just as Beijing's crackdown on corruption was gathering pace.

Australia only allows foreigners to buy new-build properties, but a parliamentary committee inquiry last year found widespread abuse of the system. Mr Hockey pledged to step up investigations where there is strong evidence of wrong-doing.

"I mean, we are not going on a witch-hunt and we don't want to create an atmosphere of xenophobia or anything else," he told reporters. "We want to be in a position where ... Australians, wherever they go, any Australian that goes to an auction needs to know that they are competing on a level playing field with people that are lawfully able to acquire the property."

Mr Hockey said that the Sydney property, called "Villa del Mare" had been bought "illegally" in November by a firm owned by Hong Kong-listed Evergrande Real Estate Group through a string of shell companies in Australia, Hong Kong and the British Virgin Islands.

Evergrande said it had appointed a local law firm in Australia to oversee the transaction.

Last month, Australia announced plans to charge foreign nationals buying residential property fees and fine those who break foreign investment laws in a bid to cool property prices.

Sydney home prices surged 13.7 per cent annually in February, adding to the pressure on the central bank to prevent a speculative run-up in home prices at a time when interest rates are at record-lows.

REUTERS