Australia joins crackdown on landlords Australia has become the latest country to crack down on landlords and overseas buyers of homes, proposing curbs on temporary residents and ramping up penalties for those who break its foreign investment laws. Australian house prices, particularly in Sydney and Melbourne, have roared higher as the country's central bank began cutting interest rates from late 2011. Cheap money has also brought in investors, who now account for roughly 40 per cent of the value of home loans. But the elephant in the room - as it is in other popular cities such as London, Hong Kong and Singapore - is the impact of foreign buyers. The proposals follow a warning from the central bank in September that the country's housing and mortgage market is becoming "unbalanced." Canberra's latest proposals are designed to improve scrutiny and enforcement of breaches. Tougher penalties for overseas buyers and advisers who break foreign investment law, and a modest application fee levied upon foreign buyers, were among 12 recommendations outlined by the House of Representatives Committee on Thursday. The committee also proposed that temporary residents divest properties within three months of their visas expiring. Residential property prices in Sydney rose 14.6 per cent in the 12 months to end- September, according to the Australian Bureau of Statistics. That compares with an 18.8 per cent increase over the same period in the average price for a house in London. The RBA has played down the impact of foreign buyers on residential house prices. Christopher Kent, the bank's assistant governor, said in June that "foreign residential purchases have probably not had a large direct effect on the price of housing that is typically purchased by first home buyers." But others disagree. Last month, 96 per cent of respondents to the Australian Property Institute's industry survey regarded foreign investment as a very significant driver of increased demand and prices for residential property in Sydney, Melbourne, Brisbane and Perth. Credit Suisse estimates there could be a further "A$44bn of Australian residential property purchases [by Chinese] over the next seven years" - almost double the past seven years" A$24bn. Australian regulators have thus far avoided introducing the sort of curbs on foreign ownership applied in Singapore, Hong Kong and New Zealand. Both Hong Kong and Singapore have in place a 15 per cent surcharge on purchases of houses by foreign buyers. These sit alongside broader measures such as larger deposits for purchases of second homes and higher stamp duty.