Real Estate

Australia forces sales of foreign-owned properties after breach of ownership laws

Beachfront houses on the Gold Coast, Australia.
Getty Images - Chris Hyde

The Australian government said it ordered the sale of another eight residential properties bought in breach of foreign ownership laws, in a response to concerns that offshore buyers were driving up house prices.

Australian capital city homes are considered among the most overpriced in the world, and the Federal Government announced penalties for foreigners who breach existing rules that restrict them to buying new homes only.

Treasurer Scott Morrison said on Monday the forced sale of eight properties takes to 27 the total number of homes the government has declared were bought illegally by foreigners, mostly Chinese nationals.

Since the foreign ownership crackdown began last year, the government said it had investigated more than 1,300 property sales and had another 800 under investigation.

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Severe penalties apply to buyers who have breached the rules.

The latest set of forced sales amounts to more than A$8 million and included a A$5.1 million house in the state of Victoria.

The estates were bought illegally by nationals from Canada, China, India, Malaysia and the United States, the statement said.

Australia's conservative government has been cracking down on foreign property sales to improve affordability, while financial regulators imposed a speed limit on growth in investment loans.

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