Property investors react
NZPA-AAP Sydney Investment property values are set to rise following the Federal Government’s decision to relax controls on foreign investment in the Australian property sector. However, the decision, announced in a series of moves seen as an attempt to support the falling Australian dollar, has drawn mixed responses from the industry. Spokesmen from Australia’s largest property investment and management groups said the changes would lead to significantly higher foreign investment, but could also reduce stability in the property market and encourage short-term rather than long-term investment. Mr Tim White, the manager of property development and management for the AMP Society, Australia’s largest property owner, said the changes were anticipated by the agency side of the industry and it was more a question of when than if.
However, owners of existing portfolios had
mixed feelings about the value of the changes, he said. Prices could become more volatile as foreign investors, looking at currency considerations, withdrew their investments when more external factors came into Play. Mr White said he expected to see the greatest interest from Japanese investors in major incomeproducing standing properties, which have been the most difficult for foreign investors. However, the effects of the changes would be gradual and would probably take “a good six months” to work through the system. Jones Lang Wootton’s national director, Mr Chris Brown, said the Government’s decision was a good move and long overdue. Under the changed legislation, 50 per cent. Australian interest will be required in developed commercial real estate. However, even this rule could be waived if a lack of local investor interest is shown.
Mr Brown said foreign investors wanted a controlling interest in property developments, and the 50 per cent rule was out of line with conditions in the United States, Japan, Britain, Hong Kong and Singapore. Mr Brown said it was too early to estimate the likely increase in values and level of investment, and the volatility of the dollar did not help. ' Lend Lease Management, Ltd, managing director, Mr Harold Ball, said he approved of the changes, provided foreign investment remained within a reasonable limit Mr Ball said the property market could become less stable — “large overseas buying that combs- and goes ... could create some volatility,” he said. “But I still think property is a much more stable commodity than shares." Mr Ball said the dollar would have to show signs of stability before foreign investors considered buying Australian property.
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Press, 31 July 1986, Page 32
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407Property investors react Press, 31 July 1986, Page 32
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