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Probe into foreign homebuyers

Investment questions: Probe into foreign homebuyers. Picture: Gerald Moscarda/The West Australian

The Federal Government is investigating claims that foreigners have illegally bought homes in Perth.

The West Australian _believes that complaints by local owners about certain purchases have been made directly to the Foreign Investment Review Board, which is looking into the allegations.

There have been concerns in Perth real estate circles that people on temporary residency visas - who are entitled to buy established homes as long as they sell on leaving the country - have kept their properties as investments.

Another issue raised is that the parents of some overseas students have bought homes on behalf of their children, a move that breaches existing laws.

It comes after claims yesterday by Treasurer Joe Hockey that more homes owned by foreigners were being investigated.

Mr Hockey gave notice this week that the buyer of a $39 million Sydney harbour-side home would have to sell the property.

It is owned by Golden Fast Foods, a holding company ultimately owned by Evergrande Real Estate Group under China's 15th richest man Xu Jiayin.

The holding company must sell the property within 90 days, even if it makes a loss after buying it in October.

It had been on the market for almost two years.

The Treasurer said that since the announcement about Golden Fast, there had been an "amazing" number of phone calls from people worried that foreigners had bought property.

The calls had come in relation to properties in a number of cities and across a range of prices.

"Wherever people believe that there has been unlawful behaviour in relation to foreign investment, we want to know about it," Mr Hockey said.

He said that he did not want to create xenophobia around foreign property purchases.

The Government was only interested in ensuring laws were enforced and that genuine property buyers did not face illegal competition.

"We want to be in a position where we maintain, preserve and enhance the integrity of the foreign investment regime and Australians, wherever they go, any Australian who goes to an auction needs to know that they are competing on a level playing field with people that are lawfully able to acquire the property," Mr Hockey said.