Property crackdown ‘won’t hurt Australia’

Treasurer Joe Hockey doesn’t believe cracking down on dodgy foreign investment in housing will damage Australia as a destination for other investment from overseas.

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Almost 200 cases of unlawful purchases of Australian houses by foreigners have been uncovered since the government started enforcing the law, and before new, tighter rules are due to come into effect on December 1.

Mr Hockey expects he will have details of more before then.

“I understand there may be a number of cases coming up,” he told reporters in Sydney on Tuesday.

Asked if this would damage Australia as a foreign investment destination, Mr Hockey said: “None whatsoever.”

“This is about the integrity of the current laws. We are applying penalties in the case of people who breach the laws,” he said.

Under the new rules, foreign buyers and those who facilitate illegal property sales face new penalties including fines of more than $100,000 or up to three years’ jail.

Foreign investors cannot buy existing properties, but are allowed to invest in new housing.

So far the Foreign Investment Review Board is investigating 195 cases, of which 40 were found thanks to community tip-offs and another 24 buyers voluntarily came forward.

The rest were discovered through an audit by the tax office.

A UK national could be the second to undergo a forced divestment after self-reporting his $700,000 West Australian property purchase.

It follows the forced sale of the $39 million Sydney mansion Villa de Mare illegally bought by a Chinese-controlled company.

Mr Hockey later confessed on 3AW radio in Melbourne that he had dobbed in one of his own neighbours, and while they did have approval to buy, it was made on “pretty spurious grounds”.

That case is yet to resolved.

Rapinoe leads U.S. past Australia in World Cup

Rapinoe’s two strikes, on either side of halftime and another from Christen Press in the 61st minute powered the Americans to the top of Group D after Sweden and Nigeria had earlier battled to a 1-1 draw.

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“That was a little bit of shaky game for us, especially the first 30 minutes, Hope (Solo) came up absolutely huge for us, I think she made three saves that I don’t think anyone else in the world can make,” Rapinoe told reporters.

“Three points. That’s what is most important, especially in this group that is shaping up a little weird.”

Having achieved just two draws in their 24 previous meetings against the U.S., Australia came out looking determined to end their frustration when Emily Van Egmond unleashed a thunderbolt from just inside the penalty area that forced a diving save from Hope Solo.

The U.S., however, drew first blood in the 12th minute when Rapinoe’s long range shot deflected off an Australian defender leaving a flat-footed Melissa Barbieri no chance.

The goal did nothing to deflate the Matildas as Australia continued to push forward with Lisa De Vanna celebrating her 100th international appearance with her 36th goal to leave the sides level 1-1 at halftime.

The U.S. broke the deadlock in the 61st minute when Sydney Leroux made a deep run down the wing and fed an unmarked Press in the box before Rapinoe sealed victory in the 78th minute.

“Obviously very disappointed in the result, I felt the performance was quite good for large patches of the game,” said Australian coach Alen Stajcic, whose side meet Nigeria on Friday.

“I thought we had plenty of chances, especially in the first 30 minutes, I guess a couple of bits of class in the end from Rapinoe changed the game.

“There are no easy games in this group and a long way to go.”

No nation will face a tougher road to the final than those in Group D, which features three teams ranked in the top 10, the U.S. (2), Sweden (5), Australia (10) and the top African nation Nigeria (33).

The U.S. will next meet Sweden where they face an intriguing showdown with former coach Pia Sundhage, who had been in charge of the Americans for five years and led them to two Olympic gold medals and a runner-up finish in the 2011 World Cup.

“It’s another opportunity to try and get some points,” said U.S. coach Jill Ellis.

“It’s going to be two teams that know each other very well.”

(Editing by Greg Stutchbury)

Mental side a focus for Fitzgibbons

After winning her second-straight Fiji Women’s Pro with a painful perforated eardrum, Sally Fitzgibbons thinks her improved mental strength could help her finally take out the world surfing championship.

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The three-time world title runner-up showed what she was made of at Cloudbreak last week when she defied medical advice to continue competing with a burst left eardrum.

The 24-year-old still can’t hear out of the affected ear but the injury is expected to take 10 days to heal, meaning she’ll be fine to surf at the World Surf League’s US Open in California from July 27.

The Australian surfer’s brave win pushed her up three spots – over fellow Australians Tyler Wright and Stephanie Gilmore – to third in the title rankings.

She says her form has been good all season and she’s developed the strength to overcome the inevitable setbacks and climb towards the top of the rankings.

“I’ve grown a lot in my surf performances and mentally have that strength to push through those tough losses,” she said.

“At the start of the season I felt confident in my performance … it’s just in surfing there’s so many uncontrollables.

“That’s where the mental strength comes in because there’s people telling you … you’re having a bad year.”

Fitzgibbons was shaking and crying with exhaustion following the gruelling Fiji final against South African Bianca Buitendag.

She says the win will likely go down as the most taxing and fulfilling of her career.

Not even a bout of food poisoning the next day reduced her post-victory high, she said.

“The whole night I was hanging out of the balcony … throwing up constantly.

“My body was done. I was absolutely exhausted. I was on such a high, it didn’t dampen the win.”

Fellow Australian Tyler Wright will be defending her championship at Huntington Beach after being knocked down two ranking spots to fifth after Fiji.

Last year’s title winner Stephanie Gilmore has slipped to eighth due to a knee injury that’s sidelined her for two months.

Home loan approvals beat expectations

Home loan approvals were surprisingly strong in April as low interest rates sparked demand for new houses.

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Home loan approvals rose 1.0 per cent in the month to 53,951, beating economists’ expectations of a two per cent fall from March.

A strong lift in lending for the construction of dwellings, up 4.3 per cent in April, was particularly pleasing, CommSec chief economist Craig James said.

“If we are going to get home prices down to more sustainable levels then you need more supply on the market, and clearly there’s people wanting to build new homes to live in, rather than investment,” he said.

Rising demand for new homes could take some of the heat out of the Sydney and Melbourne property markets, Mr James said.

“I tend to think that the situation in Sydney and also Melbourne is going to sort itself out over the next 12 to 18 months, there’s an incredible amount of new supply being built.”

The latest house price figures from CoreLogic RP Data show a rise of 14.5 per cent in Sydney and 8.8 per cent in Melbourne over the past year, much higher than in other mainland state capitals.

The value of housing finance rose 2.9 per cent in April to $32.71 billion, with investor housing loans up 2.6 per cent and owner occupied housing up 3.1 per cent.

The Reserve Bank may be concerned by rising investor housing loans, given they also surged in March, JP Morgan economist Tom Kennedy said.

“Today we saw pretty sold numbers out of both owner occupiers and investors,” he said.

“The four month (investor) trend is probably a little bit weaker than last year but it’s still too hot for where the RBA and APRA (Australian Prudential Regulation Authority) would want it.”

Tighter lending guidelines among some banks would probably “start to bite” in the next few months, Mr Kennedy said.

“We do expect these numbers to cool,” he said.

Westpac economist Matthew Hassan said February’s interest rate cut was probably the main driver of April’s stronger than expected lending, with gains in approvals across all states.

The RBA cut the cash rate to 2.25 per cent in February, before slashing by another quarter of a percentage point in May.

“Overall, the April figures indicate housing market activity may have caught a bit of an uplift from the February rate cut,” Mr Hassan said.

Business confidence hits nine month high

Business confidence has jumped to its highest level in nine months as small businesses and retailers cheered Treasurer Joe Hockey’s second budget and another rate cut from the Reserve Bank.

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National Australia Bank’s closely watched confidence barometer bounced four points in May to its highest level since August 2014.

The upbeat reading reflected big pick-ups in the retail and wholesale sectors, as well as in finance, business and property services, though confidence in the mining sector fell sharply, NAB economists Alan Oster and James Glenn said.

Confidence had been buoyed by the Abbott government’s budget, which included a $5.5 billion support package for small business, as well as the RBA’s decision to cut the cash rate to a record low of two per cent.

“Confidence appears to have received a boost from interest rate cuts, better conditions and perhaps some relief over a more politically sellable budget compared to last year,” they said.

“Low interest rates continue to support the housing sector and while momentum has slowed recently, housing and business credit continues to grow at a robust pace.”

The government’s small business package allows businesses with a turnover of less than $2 million to immediately write off the value of assets worth up to $20,000.

It also delivers a 1.5 per cent tax cut to incorporated companies and a five per cent tax discount to unincorporated businesses.

AMP chief economist Shane Oliver said the jump in confidence could be undone if the government has any trouble getting its budget through the senate.

Business confidence slumped in the second half of 2014 due in part to the poor reception to the government’s first budget, much of which stalled in the senate, Dr Oliver said.

“It remains to be seen whether it (the lift) will be sustained or not, we have seen several bounces in confidence over the last few years and they haven’t been sustained,” he said.

NAB’s survey also showed an improvement in business conditions, with its index lifting three points to its highest level since October.

Mr Oster and Mr Glenn pointed to improved conditions in the retail sector, following subdued retail sales data for the first three months of 2015.

But the bank remains relatively downbeat on the outlook for the economy, given the weakness in the resources sector.

“The big picture is still one where the domestic economy is struggling to offset the impact of sharply lower mining investment.”