Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

Recently I had the opportunity to travel to the United States with the new mayor of the Gold Coast, Tom Tate. The mayor and I went to two locations while over there. We went to Las Vegas and Miami. Although Las Vegas is very topical at the moment with Prince Harry's antics, I can assure you, Madam Deputy Speaker, that there was no naked cavorting by the mayor or I while we were there. Having put that on the record, we did learn a number of things.

Today I would like to particularly focus on what we learned when we travelled to Miami. In many respects, Miami is like the city I come from, the Gold Coast. They share an incredible wealth of similarities, including common topographies and demographics. Also unique to both cities has been the way in which the property market has performed through the GFC. Miami, it is said within the United States, was the epicentre of the property bubble bursting in that country. Certainly, when we spoke to locals there, they highlighted to us that there were 24,000 condos, or what we would call apartments, left as surplus stock in Miami.

It is a story that is not dissimilar to the state of surplus apartments that are now available on the Gold Coast as a result of the number of developments that took place at the height of the GFC. There is, however, one fundamental difference. In Miami they adjusted rules so that foreign investors could purchase these surplus apartments. They allowed foreign investors, predominantly from South America—places like Brazil, Chili and Peru—and other countries, the opportunity to invest in the 24,000 apartments that sat in Miami. And they did, in great numbers—so much so that there are now no longer any surplus apartments in Miami. In fact, they have new projects underway to help drive jobs locally. That is a point of contrast to the Gold Coast and, indeed, to Australia.

Today I say that the time has come when we should make a concerted change to policy so as to enable foreign investors to purchase strata titled apartments and also to purchase both new and resale strata titled apartments. The policy change is this: currently foreign investors are permitted to buy off the plan a new apartment if it has FIRB approval. However, they are not permitted to purchase on a resale. The argument that has historically been put is that to enable a foreign investor to purchase on a resale of a strata title apartment would push up prices. In my city, where prices are off between 50 and 70 per cent, I think the last thing we need to be concerned about is foreign investors pushing up strata titled apartment prices.

What is more, this argument that foreign investors purchasing strata title are going to push up prices completely fails to recognise that there is a natural price cap on apartment prices. The reason there is a natural price cap is that apartments have zero scarcity value. The moment the price of an apartment reaches a certain level it becomes economic to develop another apartment. The moment an apartment value reaches a certain level, it becomes economic to capture a new footprint of land and to build another tower. Because there is no scarcity value and because it is completely different to freehold, there is no sustainable argument as to why you would stop foreign investors from having the opportunity to invest their capital into the Australian market.

For a city such as the Gold Coast, which is being absolutely hammered by the poor tourism policies and other policies of this Labor government, we need a policy change like this to ensure that we can help to drive our city and our region forward. This creates opportunity to ensure that we can drive foreign investment into our city, which will help to drive new projects; help to make them economic; help to put a floor underneath the decrease in values that we have seen on strata title apartments; and help to create jobs in the construction industry, which has been our second biggest employer on the Gold Coast after tourism. We know that if foreign investors buy investment properties on, for example, the Gold Coast they will come and holiday there as well. That is also good for tourism.

The time has come for there to be a policy change. We need to allow foreign investors to buy not only new stock but also resale stock. There are hundreds, if not arguably thousands, of examples on the Gold Coast where, in some instances, Australians have bought properties, including strata titled apartments, which they have only held for a short while and now wish to sell. We have opportunities to resell those properties back to foreign investors to build up demand and, as I said, to put a floor there, to create new projects that will be economic, to help drive jobs and to help drive investment, because that foreign capital flowing into the country is good news for all of us.