Foreign investors hike up house prices

FOREIGN investment in Australian property is pushing up the price of housing and squeezing Australians out of the market, federal opposition housing spokesman Kevin Andrews says.

Changes to foreign investment rules by the federal government to allow non-resident overseas buyers to buy residential property in Australia was a problem, Mr Andrews said.

After meeting with housing and real estate industry representatives in Perth on Wednesday and in other capitals it was clear the number of non-residents buying into the market was increasing, he said.

"I've met with representatives elsewhere in Australia and it's quite clear both that in Perth and in Sydney and Melbourne and elsewhere around Australia there has been a significant influx after the last few months of foreign non-resident buyers of residential property in our cities," Mr Andrews told reporters in Perth.

"I was told here this morning of instances where one family bought numerous houses, doing that by using the names of different family members on the contracts.

"This is forcing up the housing prices for young Australians. It's meaning that Australians who go to auctions now or other ways of buying property are finding it much more difficult to get into the market."

Houses bought for capital gains purposes were sitting empty in Australia in some cases, Mr Andrews said.

"It's totally inappropriate. It came about because the Rudd government changed the rules last April and the exploitation of these changes in the rules is to the disadvantage of many Australians," he said.

The changes have allowed foreigners holding temporary visas to buy property in Australia, and the government has effectively lost control of monitoring the level of foreign investment in the market, a spokesman for Mr Andrews said.

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