Australia has announced a two-year ban on foreign investors purchasing existing homes as part of efforts to tackle soaring property prices and improve housing affordability, particularly for young Australians.
The restriction, set to take effect from April 1, 2025, to March 31, 2027, aims to make more properties available for local buyers. Housing Minister Clare O’Neil stated that the measure will help free up thousands of homes for Australians struggling to enter the market.
“We’re in the midst of a housing crisis because, for 30 years, governments haven’t built enough homes for Australians,” O’Neil said on Sunday.
The ban includes foreign-owned companies and temporary residents, such as international students. After the initial two-year period, the policy will be reviewed to determine whether it should be extended.
Opposition Criticism and Government’s Broader Housing Agenda
The opposition leader, Peter Dutton, first proposed a similar policy last year, which was dismissed at the time by the government. Opposition housing spokesman Michael Sukkar criticized the government’s move, stating:
“They absolutely rejected this policy for the last 12 months, and now, five minutes before the election, they copy it.”
In addition to the ban, the government plans to tighten rules on land banking, requiring foreign investors to develop vacant land within a specific timeframe. O’Neil emphasized the importance of prioritizing homeownership for young Australians but acknowledged that this measure alone will not solve the housing crisis.
“This isn’t a silver bullet—because there is no silver bullet,” she said. “But this is an important part of Labor’s broad housing agenda.”
Limited Impact Expected on Property Prices
Despite the policy change, experts predict minimal impact on property prices since foreign buyers make up a small percentage of the market. In 2022-23, foreign investors purchased 5,360 residential properties, with only a third involving existing homes.
To ensure compliance, the Australian Taxation Office will receive additional funding to monitor and enforce the new regulations.
With elections due by May 17, both major parties are prioritizing housing affordability as a key campaign issue. Treasurer Jim Chalmers joined O’Neil in stating that the government is addressing the crisis from multiple angles.
“These initiatives are a small but important part of our already broad housing agenda, which is focused on boosting supply and helping more Australians into homes,” the joint statement read.
