Recent discussions with prospective foreign buyers requesting to purchase established properties in the names of Australian residents indicates that this practice is now well entrenched particularly in Sydney according to RE/MAX Managing Director Geoff Baldwin.
“Our investments arm has received numerous requests particularly from Asian buyers wishing to purchase Perth properties in the name of associates who hold Australian residency status thereby enabling them to buy established homes.
“When questioned about the legality of this practice one inquirer stated that many of their friends were doing exactly that in Sydney and Melbourne.
“The audiences and successful bidders at Sydney auctions reflect a disproportionate number of foreign buyers with the same faces often appearing repeatedly.
“Foreign buyers are not generally able to purchase established properties under the guidelines of the Australian Foreign Investment Review Board however the evidence at hand would indicate that these guidelines are often being circumvented.
“The legalities of using an Australasian resident to purchase properties in their names and then having a side agreement in regards to ownership need to be examined as this practice can place massive extra pressure on prices.
“There is also the danger that if this practice is uncovered and proven to be unlawful a flood of properties coming back onto the market could cause long term uncertainty in Sydney.
“The government needs to look more closely at the circumstances of these repeat buyers and serial auction bidders to make sure they are genuinely buying for themselves and not for overseas syndicates”, Mr Baldwin said.