SYDNEY: Australia on Tuesday ordered China’s Evergrande Real Estate Group to sell a Sydney mansion worth Aus$39 million ($30 million), saying it was bought illegally under foreign investment rules.
Cashed-up foreigners, many from China, have been blamed for driving up prices in Australian property markets, particularly Sydney and Melbourne, and placing home ownership out of reach of many locals.
Last week the government said it was cracking down to enforce rules under which foreigners are only allowed to buy new dwellings and are barred from purchasing existing residential property.
In the first major case since then, Treasurer Joe Hockey said he had made an order under the Foreign Acquisitions and Takeovers Act that “Villa del Mare” in Sydney’s exclusive Point Piper district be disposed of within 90 days.
“I made this order following advice from the Australian government solicitor that the purchase breached the act,” he said, adding that if it is not sold the matter may be referred for prosecution.
Hockey said the luxury home was bought in November last year for Aus$39 million by Golden Fast Foods. It is ultimately owned by Evergrande Real Estate Group, which is listed on the Hong Kong Stock Exchange.
He added that it was purchased via a string of shelf companies including in Australia, Hong Kong and the British Virgin Islands.
“Under the Foreign Acquisitions and Takeovers Act foreign investors must notify the Treasurer through the Foreign Investment Review Board before purchasing residential real estate,” Hockey said.
“Golden Fast Foods is a foreign-owned company which failed to notify FIRB of its intended purchase.”
The property is on Wolseley Road, one of Australia’s most prestigious addresses with palatial homes boasting spectacular harbor views.
Earlier this month, the government said it would also tighten scrutiny of overseas investment in farmland, following concerns about valuable agricultural and mineral assets passing into foreign hands.