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Australian committee conducts inquiry on foreign property buyers

Australia needs to better enforce restrictions on foreign investment in housing, a lawmaker chairing a parliamentary committee on the issue said this week amid concern overseas buyers are stoking a house price bubble.

The Foreign Investment Review Board, or FIRB, which oversees rules governing such property purchases, “has demonstrated that they have not been doing their job in that regard,” Kelly O’Dwyer, chairwoman of the House Economics Committee, said at the Bloomberg Summit in Sydney.

O’Dwyer’s committee is conducting an inquiry into foreign buying of Australian residential property and is expected to report on its findings by the 10th of October.

Australia tightened rules on foreign investment in real estate in 2010, requiring off-shore buyers to purchase only new properties, and introduced penalties to enforce the changes. It also said temporary residents must obtain approval from FIRB to buy homes, and must sell when leaving the country.

Australia approved almost A$25bn (£13.9bn) of home purchases by foreigners in the nine months through to March 2014 and property prices have increased nationally by 11% in the year to August, with 16% price growth in Sydney.

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