Senate Economics Legislation Committee, , 59:02 to 1:03:30
Treasury officials are questioned regarding the ban on foreign purchases of established homes and its potential impact on investor confidence in build-to-rent developments.
Topics: Infrastructure, Procurement
Speakers: Senator Fatima Payman, Chris Tinning, Katrina Di Marco, Jenny Wilkinson
Good morning. My questions relate to the ban on the purchase of established dwellings by foreign persons. Um I refer to an article published in the Australian in June titled Treasury warned traumas on housing ban. Which quotes from Treasury documents released under OPD in which the department warned the Treasurer that uncertainty around the ban was reducing investor confidence and discouraging bill to rent investments. Um was this possibility considered before the policy was implemented?
Senator, I might just ask um Mr. Timmy uh to take this question. He's responsible for the foreign investment division.
Senator Chris Tinning, I have the foreign investment division. Uh yes, the the um ban was designed uh to uh respond to the pressures on the housing market, and the government announced that um there would be a change. The policy which enabled investors under certain conditions if there were foreign persons to purchase dwellings and the government made the decision to remove those or tighten the circumstances in which foreign persons could buy established dwellings.
I'm happy to go into details on the So you agree that investor confidence has been reduced and there's there's been a massive discouragement around the bill to rent investments.
No, Senator. The policy was very much designed to address individuals buying the process.
That's literally what the Treasury said. So you don't agree with it.
Well that the policy was designed to enable uh investment in uh increasing the housing stock. Um and so the policy was designed to address individuals buying houses but enable institutional investors to continue to what proportion of build
to rent developments involve foreign investment.
That's a considerable proportion.
Do you have a number for us?
Uh I could take that on notice.
Um I'm interested to understand like can you quantify the effect the ban has had on the bill to rent uh developments? Um and I'd love data on that too.
Yeah, we can get you data in terms of build-to-rent investment, but we've seen substantial growth in um build-to-rent investment over the past few years.
I think we'll let the numbers speak for that. Um I asked about whether there had been issues with compliance in February, Treasury responded, and I quote, details of compliance outcomes in relation to the ban on acquisitions of established dwellings by foreign persons will be published in the Treasury annual report 2025-26. I mean, do you call that an answer? It's like I'll tell you, but not just right now.
Uh well that the annual reports now out, so we could provide the process.
I understand, but this was in February when I asked, and it's bizarre that yeah that the department would just dodge that question.
Senator, if I could, sorry, um, Katrina DeMarco, Deputy Secretary, Revenue Small Business and Law Group, apologies. I've only recently moved move rolls, so I was most recently sort of responsible for foreign investment area. Um I it can be very difficult with things like residential investment, Senator, which are quite lumpy. And I think the ban had been put in place in April, in April of the previous year. So just having a look at this data in one quarter or two quarters doesn't give you a particularly fulsome picture. And I think that's why the department would have said in that response that we'll respond in the annual report, because at that time we would have had a full year with the policy having taken effect, and that's a more suitable time horizon to consider whether the policy has been effective or not. Two quarters would be very likely to be quite um uh distortionary, I suspect is the right way to think about it, or certainly at best incomplete in having to think about but your question, which gets to the issue around effectiveness.
Yeah, yeah, because I mean it there was no reason to not provide numbers to date. You know, I mean if it was two quarters, two quarters it is, and then we would have had the annual report, obviously released with the full picture. Um just go to my next question. I understand that 18 foreign investment infringement notices were issued by Treasury in the last financial year. How many of these related to foreign purchase of established dwellings and of those? What was the total value of those infringement notices?