Sydney 15 August 2016. Apartment projects are on the verge of being mothballed or not commenced because developers will be unable to satisfy the financier’s requirements for pre-commitment, following changes to foreign investment regulations and taxation.

Malcolm Gunning, principal of leading real estate agency Gunning said the effects of recent changes to foreign investment regulations and taxation will be seen towards the end of 2016 and into 2017.

“The message that has been picked up in China and seconded through our client base is that Australia doesn’t want Chinese investment,” Mr Gunning said.

“This could turn around and bite the state government in the backside because it will have a flow on effect on new off plan sales if the Chinese think that are not welcome.

“The construction industry is one of the biggest employers in NSW at the moment and the state government can ill afford to have a downturn in this most significant contributor to the economy.  

“While the changes to stamp duty, land tax and increase in compliance powers granted to the ATO as well as rules to ensure foreign residents meet their capital gains tax liabilities aren’t unreasonable the message is what is of concern.

“We should really be welcoming investment from China and the stability that it creates for our state and nation. Chinese investment should not be considered a threat and should be encouraged. We are not facing an invasion from China, but instead are seeing a group being singled out,” Mr Gunning said.