Foreign Investors Faced New Fees and Toughen Regulations to Invest in Australia

The good old days of buying a house in Australia without much fuss is far and gone to foreign investors. Earlier this May, Prime Minister Tony Abbott ordered the crackdown of foreign property buyers in Australia, as well as unveiled fees to be imposed on the new real estate acquisition and tough new civil and criminal penalties for investors who deliberately break the rules.

The proposal to introduce a new administration fee of $1,500 for foreign buyers came from the Parliamentary Budget Office and is expected to be enforced starting July 1 this year. The new fee is estimated to raise $50 million for the Australian government every year and $600 million over the next decade. It will be used to fund the crackdown on investors who purchased established homes rather new ones (as what's mandated on the FIRB's regulations).

Under the crackdown, new and toughen penalties face those who are found to violate the law. These include a 3-year jail time and fines of $127,000 for individuals and $637,500 for companies.

They will apply to foreign buyers and real estate agents who facilitate the illegal sales of Australian properties.

Why the crackdown?

Under the FIRB rules, foreign property buyers are not really allowed to buy existing residential properties unless approved by the Board on the basis that it will drive housing stock. However, there has been a growing concern that the rules have been deliberately violated, with foreign buyers driving prices up and pricing the locals out of the heated property markets, such as Sydney, Brisbane and Melbourne as well as the rising Gold Coast real estate market.

Abbott hopes to address this concern through the new regulations. “We want to ensure that locals are getting a fair go, that the playing field is at least level and, if possible, slightly tilted towards the locals,” he said.

Foreign investors who have violated the law will have until November 30 to come forward without penalty. However, they will be forced to divest their properties.

Why The Gold Coast Is A Top Destination For Real Estate Investment

The Gold Coast of Australia features beautiful ocean settings, excellent property offerings, and a thriving real estate market that draws investors from all over the world. These are just a few reasons why the Gold Coast is favored by tourists, investment money, and world-class investors from Australia and countries including China, South Korea, Japan, and Malaysia. If you're interested in investing in real estate that has historically offered amazing returns and is set for strong future growth, you need to know why the Gold Coast should be on your radar.


Plenty of Real Estate Opportunities For Every Buyer

The Gold Coast features many different real estate investment opportunities, including high-rise office towers, luxury residential developments in Surfers Paradise, smaller value apartment units, and condos with beachfront views of the Sunshine Coast.

In fact, The Gold Coast features 70 kilometers (43 miles) of pristine coastal beaches, and waterfront property is always in demand. The amount of real estate investment possibilities that The Gold Coast presents means there are opportunities for both big and small investors who want property that delivers a lifetime of excellent returns.

Consistent Growth

The Gold Coast has historically featured explosive real estate growth. The Real Estate Institute of Queensland (REIQ) reported that the median real estate price of Gold Coast property grew at 5 percent in 2014. Low interest rates in Australia are helping to support strong demand for properties going into the future.

The Gold Coast also attracts retirees from all over Australia and beyond to its beautiful shores, amazing dining scene, and unique cultural opportunities. In addition, the upcoming 2018 Commonwealth Games are expected to attract new investment, fuel the Gold Coast's booming economy, and increase already tight demand. There are still plenty of deals out there, which means investment opportunities abound for smart buyers.

A Vacancy Rate that Underlines Strong Demand

One of the most important data points that supports strong demand is vacancy rate, and the Gold Coast happens to have a particularly low one. According to SQM Research, the rental vacancy rate was at 1.4 percent in 2015, which represents a 10 year low. That means there's plenty of demand from renters and strong population growth within the Gold Coast, which is what real estate investors like to see.

This low vacancy rate has helped support the rising Gold Coast median rental price on both residential and commercial units, which means real estate investors are in a strong position to capitalize on demand.

Perfect For Foreign And Asian Investors

The Gold Coast is especially interesting for Asian buyers from China, South Korea, Japan and many other Asian nations. It lies in close proximity to Asia, already has attracted plenty of Asian buyers historically, and is welcoming to foreign investment.

Asian and international investors can also take advantage of the falling Australian dollar. For example, the Chinese Yuan has only strengthened relative to the Australian dollar in the past year, meaning that many Asian investors can snatch up properties for the right price to ensure solid returns on their real estate purchases.

There's no doubt that the Gold Coast will continue to be a bright spot on the international real estate market. If you're interested in quality investments in Australia, it's clear that the Gold Coast should be the first real estate destination on your list.