Australia will tighten rules on foreign investment in real estate, and introduce penalties to enforce the changes, to ensure pressure isn’t placed on housing availability for local residents.

Temporary residents will require approval from the Foreign Investment Review Board to buy property, and will have to sell when leaving the country, Assistant Treasurer Nick Sherry said. It ensures “working families are not being priced out of their own family homes,” Prime Minister Kevin Rudd said in Canberra today, a transcript from his office shows.

Treasurer Wayne Swan eased restrictions on non-residents in late 2008, making it easier for foreigners to buy property without government approval. Surging house prices, which advanced more than 10 percent last year, were among reasons the Reserve Bank of Australia boosted the benchmark interest rate this month for the fifth time in six meetings.