Government eases restrictions to encourage foreign investment An Australian government economic stimulus initiative is good news for Hong Kong investors seeking exposure to the Australian property market. In a move aimed at energising a domestic property market feeling the pinch of the global downturn, the Australian government announced a package of changes in mid-December which will see considerable relaxation of the rules governing overseas investment in residential property. Two of the changes will be of particular interest to Hongkongers. The requirement that only 50 per cent of new dwellings can be sold to foreigners 'off the plan' has been removed. This rule required a minimum of 50 per cent of a multiple-residence development, such as a block of units, to be sold within Australia. Now the developer has to commit only to marketing the development domestically. The second change is removing the A$300,000 limit for foreign students on the value of an established dwelling purchased as their principal place of residence. The revisions will be implemented over a period of several months and remove or loosen several restrictions on non-residents investing in property in the country. Generally, there are no restrictions for Australian citizens, permanent residents and New Zealand citizens in the Australian property market. Temporary Australian residents on long-stay visas, such as students, are allowed to buy a house if they use it as a residence. No renting or sub-letting is allowed, and the house must be sold when the visa expires or they cease to reside in Australia. For everyone else, Australia is happy for them to invest in property in the country, but there are conditions. Generally, it is fairly simple for non-Australians to invest in commercial property, while investment in residential property is governed by complex rules. All residential property purchases by non-Australians require approval by the Foreign Investment Review Board of Australia (FIRBA). Generally, such purchases will be approved only in the following circumstances: properties bought off the plan (ie, a newly built apartment or house); properties built on land bought by the investor; substantially renovated properties (the renovation to be worth at least 50 per cent of the cost of the land); or properties intended only for use as a residence for the buyer. Purchase of residential properties outside the above categories is possible only with FIRBA approval, a process which can take up to 90 days, considerably longer than the normal settlement period on residential property sales in Australia. Details are available at www.firb.gov.au .