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The Weekend Neos Kosmos : 6 December 2014
2 Page 5 AUSTRALIA Australia the best place for students Foreign buyers on notice Foreign ownership rules are being flouted, as the government’s watchdog admits failure in policing the buying and selling of Australian properties HELEN VELISSARIS Foreign buyers have been flouting rules on buying existing dwellings in Australia, potentially boxing out first home buyers and local buyers. A recent parliamentary economic committee report has slammed the Foreign Investment Review Board (FIRB) for failing to monitor the number of properties being bought by foreign buyers. Currently, Australia only permits foreign buyers to buy new dwellings, but they are permitted to buy existing homes under limited circumstances. They are allowed to buy existing homes on the provision that they sell their properties after they leave Australia. But the review board in charge of monitoring these rules has failed to police the buying and selling of these properties. The board approved 5,091 applications to buy existing houses last year by foreign buyers, up from 647 approvals three years earlier. Since 2003, the board has issued just 17 orders for foreign investors to divest il- legally acquired property in Australia. The parliamentary report found that there was also a lack of data collected to track how many foreigners had purchased homes in the country, indicating that there was no way to accurately show if the situation was getting out of hand. A recent NAB survey found that foreigners accounted for 8 per cent of demand in existing dwellings, while one in six new properties were being bought by foreign buyers. Greek Australian real estate agent for Nelson Alexander, Spiros Karagiannidis, says he's seeing first home buyers and locals concerned that they will be shut out of the market thanks to unregulated foreign ownership. "It is already quite competitive out there; introducing an extra segment in the market by allowing international ownership will make it even harder for first home buyers to secure a home," Mr Karagiannidis tells Neos Kosmos. "Currently in the Melbourne market there's not quite enough supply, and increasing that demand will ensure that prices will go up." Real estate agent for RT Edgar, Socrates Callas deals with a number of foreign buyers and says their inclusion in the market means better clearance rates for auctions and a more competitive market. Working in the Hawthorn area of Melbourne, he's assisted a number of foreign buyers to invest, and has seen prices skyrocket. "We've sold properties $200,000-$300,000 over the reserve and that's thanks to overseas buyers," he says. "They pay a lot more but if you look at it over the long term, these properties will be worth double, so it's worth paying a little bit more and getting what you want." While he agrees it is slightly unfair for local buyers who are looking to pay market price, Mr Callas believes competition means houses will remain sound and lucrative investments. "Try and stretch your budget," he says. In an effort to make the housing market a fairer place for all, the parliamentary economic committee report did leave the government with some suggestions. It hopes to see the creation of a national database to track the address of every property purchased by a foreign owner and their country of origin. It also suggested that foreign buyers be forced to pay $1,500 to put in an application to buy a properly, while real estate agents who help foreign owners circumvent laws could face criminal charges and civil fines. The facade of the planned $200 million project. Adelaide site to receive multi-million dollar overhaul Makris Group reveals plan to develop 7,500m² former Le Cornu site JOHN PYRROS Australia's richest Greek Con Makris has unveiled plans to redevelop his site at O'Connell St, North Adelaide following previous failed attempts. Foreign buyers are only allowed to purchase new dwelling in Australia, but many have circumvented that law. Makris' company, the Makris Group, will wholly fund the $200 million project, which will include a high market hotel, luxury apartments, a shopping complex, the first Australian built Whole Foods Market (an America grocery chain), as well as cafes and restaurants. Makris told Neos Kosmos he expects construction to begin by the second half of 2015, in an area he likens to Kolonaki and Syntagma in Athens. "(South Australia premier) Jay Weatherill gave his blessing, the mayor of Adelaide gave his blessing, the shopkeepers association has given its blessing, every department here in South Australia is supporting it because Adelaide needs something like this. North Adelaide is the Kolonaki of Adelaide, it's where all the rich people live and it's less than one kilometre from the centre of the CBD, across King William Road. The same way Syntagma is in Greece, where you travel down Kolonaki, it's similar to that." The site, which historical- ly housed furniture store Le Cornu until 1989, has been an empty lot since. Makris purchased it in 2001, with plans to develop it in 2008 shelved due to the onset of the global financial crisis (GFC). "We had approval back in 2008 which was different to this. Back then we couldn't build more than five storeys, we had approval for only five, and I mean it was a blessing that we didn't build because now we have about 16 floors." "It would have been stupid for us to build if we couldn't sell apartments (because of the GFC) so we didn't go ahead with it and we waited for an opportunity. Now under the new rules of the state government here, we can build at any height provided we satisfy the government, and we have done that." He estimates construction will create 700 jobs, with a further 700 for the service and maintenance of the complex, which he hopes will add to his legacy in his native state. "It's my dream! I want to leave a legacy in South Australia. I have so many prop- erties around all of Australia and I want to leave something here, because I came here as a 16-year-old and I became the most successful businessman." "It will change North Adelaide ... O'Connell Street used to be the number one street in South Australia, but in the past 10 years it has spiralled downward. By doing this, the mayor came out and said the council will fix everything, the pavers for the streets, more trees, and he urged people with other properties in the area to redevelop." With final approvals set to be formalised, Makris is confident there won't be any issues involved with its development, including through the public consultation period. "Well, they had it in the newspaper and 85 per cent of people are supporting it. I mean when you see the premier on television supporting it and the mayor supporting it, who's left?" The project coincides with the company's $50 million extension of Gilles Plains Shopping Centre in Adelaide's north-east. SATURDAY 6 DECEMBER 2014 Page 10 Living on wheels The site will include a garden and a piazza.
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