Chinese buyers are still snapping up billions of dollars of Australian property despite a crackdown by tax authorities on dodgy purchases.

Chinese investment in Australian property almost doubled in the last financial year to $24.3 billion, up from $12.4 billion in 2013/14, and was more than three times as much as the next-biggest investor, the United States, in 2014/15.

• The great apartment shakeout has begun
• ABS figures show a tale of slowing housing prices
• House prices fall for the first time since 2012

The explosion in Chinese investment comes despite a highly publicised crackdown by the Australian Tax Office last year in response to a spate of multi-million-dollar property purchases by young Chinese students in Australia.

ATO commissioner Chris Jordan alleged at the time that many of the transactions were by students with little or no reported income.

“We are seeing examples of very young people, who are here on student visas, who have not lodged a tax return, who are buying $5 million properties,” he said.

This $52 million ‘trophy home’ in Sydney was snapped up by a 27-year-old.

The sales sparked outrage not only among fellow students struggling to cope with skyrocketing city rents, but even among sections of the Chinese community affronted by the ostentatious spending of the young arrivals.

The most notable purchase was a $52 million home in Sydney’s ritzy Vaucluse by freshly graduated, 27-year-old ‘Jim’ Shangjin Lin.

But agents and auction watchers have reported many other top-end purchases by young students suspected to have bought the homes on behalf of non-residents who are otherwise barred from buying established residential property, and limited to off-the-plan purchases only.

The raft of suspect purchases prompted former federal treasurer Joe Hockey last year to launch an ATO crackdown that included an amnesty provision allowing illegal buyers to avoid fines of $135,000 or three years imprisonment if they came forward before the end of November 2015.

An ATO spokesperson said the department had ordered the sale of 26 properties over the past two years, ranging in value from $152,000 to $8.1 million.

But the most spectacular case was the forced sale of a $39 million Sydney mansion that had been bought illegally by a foreign-owned company in March 2015.

The ATO confirmed almost 2000 matters had been referred for investigation over the past two years, more than 1100 of which were tip-offs from the community.

In that time the ATO had concluded about 1000 cases and taken action in more than 200. The ATO spokesperson said the authority was investigating about 1000 more cases spread across all states and territories.

A house in Melbourne’s Hawthorn East that was bought by a Chinese investor at auction last year for $5.2 million. The investor was forced to sell by the Australian Taxation Office for breaching foreign investment laws. Photo: AAP

Chinese buyers becoming more scarce

Melbourne-based buyer advocate David Morrell, of Morrell and Koren, told The New Daily he’d seen “many examples” of dodgy purchases in Melbourne’s inner-eastern suburbs, many of them not involving any bank finance.

“We were seeing 19-, and 20-year-old [Chinese] girls buying multi-million-dollar homes in the likes of Balwyn, Canterbury, Kew and a little bit in Toorak, and even the odd trophy home,” Mr Morrell said. “At one auction … I witnessed what would have been 20 carloads of Chinese people inspecting just about every property in the street.”

One source said he’d tipped the ATO off with 19 examples of suspect purchases in Melbourne’s eastern suburbs alone.

But Mr Morrell said Chinese buyers had become noticeably more scarce since November, coinciding with the Federal Government’s amnesty on illegal purchases and a tightening of capital outflow from China by the government there.

“It has really been curtailed, in fact the Chinese have hardly been seen since the end of November. I think it’s had more to do with China making it harder to get money out of the country,” Mr Morrell said.

But spokesman for Chinese international property website Juwai, Dave Platter, told The New Daily, his company projected Chinese investment in commercial and residential property to hit about $290 billion globally by 2020, and that “Australia can expect a significant share of that investment”.