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Selling off the farm

The National Party says it's not just capital city housing markets that are being distorted by overseas investors - they want tighter restrictions on foreigners buying farms.

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Chinese investors have helped to boost the supply of Australian houses without making it harder for first-home buyers, Australia China Business Council president Duncan Calder says.

And data from the Foreign Investment Review Board supports the claim that the Chinese property splurge is overblown, with overall foreign investment in Australia's residential property falling by 18 per cent in the past two years.

I just hope that now people will be a bit more reticent for calling us bigots, xenophobes and rednecks, because I haven't been run over by the press with the same concerns about this. 

As debate over foreign investment in the overheated Sydney and Melbourne property markets steps up, the government will release the terms of reference for an inquiry on foreign investment in Australia's real estate market on Wednesday.

Investors crowd round an Australian booth at a property fair in Beijing.

Impact overstated: Investors crowd around an Australian real estate booth at a property fair in Beijing. Photo: Sanghee Liu

House economics committee chairwoman Kelly O'Dwyer said it was timely to re-examine rules on foreign investment. ''We will establish the facts in the inquiry, see whether or not the discussion is supported by the evidence and have an opportunity to discuss these issues with all affected parties.''

The original mandate for foreign investment was to ensure the supply of dwellings in Australia was increased, she said. The inquiry would examine if the present investment settings were working, as well as restrictions on foreign buyers purchasing existing homes.

''No one is against foreign investment. This is not an inquiry that is saying in any way that foreign investment is bad,'' she said.

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"This is not an inquiry that is saying in any way that foreign investment is bad": House economics committee chairwoman Kelly O'Dwyer. Photo: Ken Irwin

Agriculture Minister and Nationals MP Barnaby Joyce backed the inquiry, arguing the concerns country people had held for years about rising foreign investment in real estate were spreading to the city.

''I just hope that now people will be a bit more reticent, especially in the fourth estate, for calling us bigots, xenophobes and rednecks, because I haven't been run over by the press with the same concerns about this as when we raised these concerns,'' he said.

Nationals senator John ''Wacka'' Williams supported these comments, saying the inquiry was timely, given the billions of Chinese investment dollars pouring in.

''Our city colleagues are now experiencing what we have experienced in rural areas,'' he said.

''We've been called xenophobes for wanting regulations on who we sell farms to. It's ironic this rural problem has now flowed through to our cities.''

Mr Calder said: "I think there are a lot of positives from the flow of Chinese investment into real estate,'' he said.

''If we didn't have those investment flows, I think what would follow is we would see a fall-off in our property development, and that would mean a loss of jobs for Australians.''

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