Foreign Investment Review

The Foreign Investment Review Board recently released their Annual Report for 2013/14. It revealed that the total number of foreign investors, investing and buying Australian homes had tripled last financial year.

The total spend and value of foreignly invested properties, specifically off-the-plan apartments, rose from $5.73b to $16.4b.

Brian Wilson, Chairman of the Foreign Investment Review Board sent the review to Treasurer MP Joe Hockey, and outlined the following…

“The Board examines significant foreign investment applications and advises on potential national interest concerns. In 2013-14, the Board examined a range of high profile investment applications, including Archer Daniels Midland Company’s proposed acquisition of GrainCorp Limited which was determined to be contrary to the national interest on 29 November 2013.

Real estate and services related applications accounted for around 76 per cent of the value of approvals in 2013-14. China was the largest investor in 2013-14 in terms of the value of all approvals (17 per cent of the total value), followed by the United States and Canada. The Board considered and monitored applications from a wide range of countries and noted the continuing increased investment interest in Australia by sovereign funds from North America, Europe, the Middle East and Asia, demonstrating Australia’s ongoing competitiveness as an investment destination.

Foreign investment in agriculture and residential real estate continue to attract significant public and political interest. The Board monitored developments in these areas and contributed to Government and Parliamentary considerations of the issues involved. For example, the Board participated in the House of Representatives Standing Committee on Economics Inquiry into Foreign Investment and Residential Real Estate.

The Board has built on previous efforts to enhance awareness and understanding of Australia’s foreign investment arrangements with additional engagement activities in Australia and overseas. For instance, the Executive Member of the Board and I visited China again in May 2014 to further the Board’s engagement with officials and potential investors. The visit included a focus on broadening our constructive investment dialogue into regions not previously visited such as Western China, allowing for a more extensive appreciation of Chinese investors, their investment prospects and their understanding of our foreign investment regime.

The Board has continued its long standing practice of examining the consistency of proposals with Australian corporate governance standards and commercial practices. The Board maintains factsheets on corporate governance, corporate law, market activity, directors’ duties, competition and consumer law and taxation obligations on its website and investors are directed to this information when they receive foreign investment approval.”

Foreign investment in Australia continues to grow, and whilst the tripling of numbers in the 2013/14 financial year are impressive, the future for off-the-plan apartments will continue to grow even more.

Unsurprisingly, China (14,716) leads the approval count, with Malaysia (1,542) and New Zealand rising up the table as well. The review for the 14/15 financial year will prove to be equally as interesting...