Morning Briefing: Mirvac unfazed by halt to foreign lending

Mirvac unfazed by halt to foreign lending
The chief executive of real estate group Mirvac believes the company will maintain strong settlement rates on apartment sales despite the major banks’ new restrictions on lending to foreign buyers.

Susan Lloyd-Hurwitz told Australian Financial Review, “We're yet to see the impact that will have on financing but we work closely with a lot of our purchasers and they get a lot of notice from us as to when they're going to need the money.”

Sale to foreign buyers are thought to make up 20-30% of Mirvac’s total sales. However, some of these buyers use cash while others use global banks or their own lenders. Foreign buyers looking to borrow in Australia, in order to build a credit profile, is a relatively new phenomenon.

"I'm not denying if there is no financing from Australian banks for foreign buyers it wouldn't change customer behaviour," Lloyd-Hurwitz said.

"We'd have to work harder with them to go back to where we were a few years ago when they weren't relying on domestic financing."

Retaining negative gearing is in the 'public interest'
The debate about negative gearing’s impact on the property market seems to be showing no signs of slowing down, with the Real Estate Institute of Australia (REIA) the latest body to enter the fray.

As the Federal government engages in a back-and-forth with independent think-tank the Grattan Institute about what impacts the tax break has on the property market, the REIA claims retaining the negative gearing status quo is in the public interest.

“With large increases in house prices in Australia's two largest capital cities, there have been many claims that the current tax treatment of negative gearing and capital gains of residential property is exacerbating housing affordability issues,” REIA president Neville Sanders said.

“This is simply not the case. Indeed the public interest is being served and advanced through the current taxation arrangements,” Sanders said.