Foreign investors critical to wellbeing of property construction markets

Nyko Property says foreign investors critical to wellbeing of property construction markets 9.1% of all Australians rely on construction for employment

Foreign investors play a critical role in the Australian residential property market, with the current guidelines to investing providing the right legislative framework, says Nyko Property Director Bill Nikolouzakis.

In a submission to the House of Representatives’ Standing Committee on Economics inquiry into Australia’s foreign investment policy for residential real estate, he said foreign investment helped underpin the residential construction market, especially for inner-city apartments, and as such was evidence that the system was working.

“From our experience there is a degree of misunderstanding around foreign investment in residential real estate. In our opinion, this misunderstanding, and, in some instances, the misreporting of what is and isn’t permissible in terms of foreign investment in residential property, has the potential to damage a valuable source of investment in a $4.75 trillion industry.

“What is often forgotten is that foreign nationals can’t buy existing residential property, but they can typically get approval to buy residential property in new developments so they are not competing with first home owners or anyone else for those existing properties.” [This can occur either before, during or immediately after construction.] Mr Nikolouzakis said it was Nyko’s experience that foreign investors normally bought apartments in the larger blocks within the CBDs of Melbourne and Sydney and to a lesser extent Brisbane.

“This is a market that Nyko Property’s clients in Australia normally are not very supportive of as an investment option and are therefore not competing with foreign investors for those properties. “We see the involvement of foreign investors (Nyko has established an office in Indonesia) in the residential property market to be completely positive from that standpoint, investing in property that is required for our cities to grow and become the cosmopolitan centres that we know work so well across the world when people live closer to their workplaces. “In addition, it’s worth noting that the construction industry makes up 9.1% of the Australian workforce and a change in the rules for foreign investors making it more difficult for them to invest in new Australian property would be detrimental to that industry in a workforce that is already struggling with job losses in manufacturing.” Mr Nikolouzakis said the current process appeared to be streamlined in such a way where it did not cause any roadblocks for foreign investors while giving Government the relevant information to perform checks on this investment.

“Foreign investment, operating under the right guidelines, can continue to be a valuable source of capital to enable positive social outcomes for the Australian populace.”

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Christine Toll
Shed Media
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