In a bid to cool the rapid growth in house prices and deal with the claim that “The Foreign Investment Review Board (FIRB) is hopeless” in dealing with foreign buyers, the federal government is considering a series of measures including visa checks and heavy fines, to deter foreign investment in the housing market, reports The Australian.

A parliamentary committee reviewing foreign investments in the Australian property market is expected to deliver a report that will be highly critical of the performance of the FIRB, the gatekeepers entrusted with the management of the flow of overseas investments into Australia.

Generally, foreigners are barred from buying established homes but are allowed to own them while in Australia, provided they sell them within three months of departure.

The Australian reports that the FIRB has been a sleep at the wheel in its enforcement responsibilities in this respect noting that, “[The FIRB] has not forced a single ­investor to sell an illegally ­acquired home since 2008, during which time foreigners have bought tens of thousands of established homes.”

It is expected that the committee will propose:

• a ban on marketing real estate developments solely to overseas investors;
• a nationwide land-transfer database to track the ­nationalities of offshore buyers;
• data-sharing arrangement that will require DIBP to automatically advise the FIRB whenever a property owner’s visa expires;
• impose fees for foreign investors seeking FIRB approval to purchase property;
• impose fines for a breach of the FIRB rules; and
• tighten regulation of offshore investment in real estate.

Australian house prices have risen dramatically in recent years, with the cities of Sydney and Melbourne leading the gains. Record-low interest rates have fed speculative residential-property buying among Australians themselves, but anecdotal evidence points to the growing participation of foreign buyers—especially from China.

Housing affordability is a hot-button political topic in Australia, where first-time buying is near-record lows. House prices are up by about 10% from last year, and prices in Sydney have risen by closer to 15%