China owner must sell Sydney mansion bought 'illegally'
AUSTRALIA has ordered the Chinese owner of a A$39 million (S$42 million) Sydney mansion to sell up, the first crackdown on foreign residential purchases in nearly a decade amid government attempts to cool one of the world's hottest property markets.
Villa del Mare was bought "illegally" in November by Golden Fast Foods - a firm owned by Hong Kong-listed Evergrande Real Estate Group - through a string of shell companies in Australia, Hong Kong and the British Virgin Islands, Treasurer Joe Hockey said in a statement yesterday.
Golden Fast Foods has 90 days to sell the property or face legal measures, the statement added.
Executives at both Golden Fast Foods and Evergrande were not immediately available to comment, but one of the agents involved in the deal, Christie's International Real Estate, said the property was purchased by an Australian company.
Australian property has long been a popular choice for Chinese money - both legitimate and illegitimate - but investments appear to have accelerated in the past year as Beijing's crackdown on corruption gathered momentum.
Australia restricts foreigners to buying new properties, but a parliamentary committee inquiry last year found widespread abuse of the system.
Villa del Mare, with sweeping Sydney Harbour views and an infinity edge pool, is at least a decade old. "It seems like they are making an example of a property of this stature and size to say that it is really crucial that these rules are followed," said Nicolette van Wijngaarden, managing director of global luxury property sales and rentals at Unique Estates Australia.
Evergrande, the fourth-largest property developer in China by sales, is owned by Hui Ka Yan, China's 15th-richest man with a net wealth of around US$6.4 billion (S$8.7 billion), according to Forbes.
Last month, Australia announced plans to charge foreign nationals who buy residential properties fees and fine those who break foreign investment laws, in a bid to cool property prices that are increasingly becoming a headache for policymakers.
Sydney home prices surged 13.7 per cent annually last month, adding to the pressure already on the central bank to prevent a speculative run-up in home prices at a time when interest rates are at record lows.
The six-bedroom Villa del Mare once belonged to a London-based entrepreneur who almost doubled the A$21.5 million she paid a decade ago for the Mediterranean-style property, according to property website Domain.com.au.