Trade deal a boost for property industry

The recently signed China-Australia Free Trade Agreement (ChAFTA) will provide a raft of opportunities for the property industry, according to the Property Council of Australia.

As well as opening up markets for agriculture, mining and other industries, the ChAFTA will have three specific benefits for property investors in China and Australia and will boost infrastructure development.

•  Boosts Chinese investment in Australia by raising FIRB thresholds

ChAFTA will promote further growth of Chinese investment in Australia, in particular by raising the screening threshold at which investments in non-sensitive sectors by private sector entities from China are considered by the Foreign Investment Review Board (FIRB). The threshold will be raised from $248 million to $1078 million.

Consistent with the promise made by the Coalition at the last election, the government will be able to screen investment proposals by private investors from China in agricultural land valued from $15 million and agribusiness from $53 million.

• Opens up overseas investment opportunities for Australian developers and property service providers

Construction and engineering services: China will provide new market access to Australian companies undertaking joint construction projects with Chinese counterparts in Shanghai. Australian companies will be exempt from business scope restrictions, allowing them to undertake a wider range of commercially meaningful projects.

Other services sectors: Australian providers will benefit from new Chinese commitments allowing them to offer a range of services, including through subsidiaries based in China that can be wholly Australian-owned. This will apply to the following sectors: software implementation; research and development; services incidental to manufacturing; building cleaning; printing of packaging materials; translation and interpretation services; real estate; and environmental services.

• Reduces barriers to labour mobility and migration rules for large-scale infrastructure projects

This will increase the number of, and timeliness of getting, critical projects online. Investment Facilitation Arrangements (IFAs), which will operate within the framework of Australia’s existing visa system, will provide greater flexibility for companies to respond to unique economic and labour market challenges. IFAs will be available for large infrastructure projects above $1 million, strengthening investment in this key area and leading to the creation of jobs and increased economic prosperity for all Australians.