Australia Imposes Two-Year Ban on Foreign Investors Buying Existing Homes
Starting April 1, 2025, Australia will ban foreign investors from purchasing existing homes to address the country's housing crisis. The measure aims to free up around 1,800 properties annually for local buyers and will be reviewed before its scheduled en
Housing CrisisForeign InvestorsAustraliaReal EstateHousing MarketReal EstateFeb 25, 2025
The measure, expected to free up around 1,800 properties annually for local buyers, will be reviewed before its scheduled end on March 31, 2027.
Announcing the decision, Treasurer Jim Chalmers and Housing Minister Clare O’Neil emphasized that the ban aims to curb foreign competition in the housing market, particularly as affordability remains a pressing issue ahead of the general elections.
Foreign investors, including temporary residents such as international students and foreign-owned companies, will be barred from buying established dwellings.
However, they will still be permitted to purchase newly built homes to encourage housing supply.
To further discourage 'land banking'—where investors hold onto undeveloped land, limiting supply—the government will require foreign buyers of vacant land to develop it within a set timeframe.
Additionally, foreign-owned properties left vacant for more than six months in a year will be subject to an annual vacancy fee.
The policy aligns with similar restrictions introduced by the previous Coalition government and is part of broader efforts to stabilize the housing market.
Housing prices in major cities have skyrocketed in the past decade, with Sydney’s median dwelling price reaching A$1.2 million, according to CoreLogic data cited by The Straits Times.
Foreign investors purchased A$4.9 billion worth of residential real estate in the year ending June 30, 2023, with one-third of that spent on existing dwellings, the Australian Taxation Office reported.
While the ban is expected to ease demand pressure and improve access for local buyers, some experts warn that restricting foreign investment could slow new housing development and impact the broader economy.
The government plans to assess the policy’s effects before deciding whether to extend it beyond 2027.
Frequently Asked Questions
What is the purpose of the ban on foreign investors buying existing homes in Australia?
The purpose of the ban is to address the country’s housing crisis by reducing foreign competition in the housing market, thereby making it easier for local buyers to purchase homes.
When will the ban on foreign investors buying existing homes start and end?
The ban will start on April 1, 2025, and is scheduled to end on March 31, 2027. It will be reviewed before the end date to assess its effectiveness.
What are the restrictions placed on foreign investors under this policy?
Foreign investors, including temporary residents like international students and foreign-owned companies, will be barred from buying established dwellings. However, they can still purchase newly built homes.
What measures are being taken to discourage 'land banking'?
To discourage 'land banking', the government will require foreign buyers of vacant land to develop it within a set timeframe. Additionally, foreign-owned properties left vacant for more than six months in a year will be subject to an annual vacancy fee.
What are the potential impacts of this policy on the housing market?
While the ban is expected to ease demand pressure and improve access for local buyers, some experts warn that it could slow new housing development and impact the broader economy. The government plans to review the policy’s effects before deciding whether to extend it.
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