Government introduces two-year restriction to address homeownership challenges
Australia will prohibit foreign investors from purchasing existing residential properties for two years, aiming to ease housing affordability pressures.
The ban, set to take effect from April 1, 2025 to March 31, 2027, will apply to non-residents, including temporary visa holders such as international students and foreign-owned businesses.
Housing minister Clare O’Neil (pictured) announced the policy on Sunday, stating that the measure would “free up thousands of properties for Australians.” She attributed the current housing crisis to decades of inadequate home construction.
“We’re in the midst of a housing crisis because, for 30 years, governments around the country haven’t built enough homes for the Australians who need it,” O’Neil said.
In addition to restricting foreign ownership, the government will introduce stricter rules on land banking, requiring foreign investors to develop vacant land within a specific timeframe. O’Neil said these steps were necessary to support young Australians seeking homeownership.
“This isn’t a silver bullet, because there is no silver bullet,” she said. “But this is an important piece of Labor’s absolutely massive housing agenda.”
To ensure compliance, the Australian Taxation Office will receive additional funding for enforcement.
“We’re coming at this housing challenge from every responsible angle,” O’Neil said in a joint statement with Treasurer Jim Chalmers. “This is all about easing pressure on our housing market at the same time as we build more homes.
“These initiatives are a small but important part of our already big and broad housing agenda, which is focused on boosting supply and helping more people into homes.”
While the measure is expected to generate debate, analysts suggest it may have a limited impact on housing prices, as foreign investors represent a small share of the market. In the 2022-23 financial year, foreign buyers made 5,360 residential property purchases, with only about a third involving existing homes.
“It’s a minor change, but a meaningful one because we know that every effort helps in addressing the housing challenge we’ve inherited,” O’Neil said.
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