With the Labor government set to implement a two-year ban on foreign investors purchasing existing homes starting April 1, 2025, time is running out for overseas buyers to secure property in Australia. The policy, which mirrors a similar proposal from the Coalition, aims to curb foreign competition in the housing market but is expected to have limited impact on overall affordability.
Why Foreign Investors Should Act Now
From April 1, 2025, to March 31, 2027, foreign investors—including temporary residents such as international students and foreign-owned companies—will be prohibited from purchasing established dwellings in Australia. This means that foreign buyers who want to secure an Australian home must act quickly before the restriction takes effect.
Exceptions will be made for foreign investors purchasing new properties, as the government seeks to stimulate housing supply. Additionally, workers on a Pacific visa scheme will not be affected by the ban. To further regulate foreign investment, those purchasing vacant land will be required to develop it within a reasonable timeframe.
Limited Impact on Housing Affordability
While the policy aims to prioritize local buyers, its effectiveness is questioned by industry experts. In the 2022/23 financial year, foreign investors accounted for just 5,360 residential real estate purchases, with only about one-third involving existing homes. This amounts to less than 0.4% of the total housing market, leading many to believe that the ban will not substantially affect housing affordability.
Matthew Kandelaars, Executive for Policy and Advocacy at the Property Council, acknowledged the importance of encouraging housing supply but pointed out that foreign investments have historically played a role in Australia's urban development.
"Australia has relied on global investment—using other people's money to help build and shape our cities—for the last three quarters of a century, and we shouldn't stop now," Kandelaars said.
Political Reactions and Policy Shifts
The Coalition originally proposed the two-year ban in its 2024 budget reply speech, with opposition leader Peter Dutton arguing that foreign ownership was a barrier to homeownership for Australians. At the time, Labor dismissed the idea, with Treasurer Jim Chalmers calling it "unhinged" and Minister Bill Shorten claiming that foreign ownership was too minor a factor to justify the policy.
Now, with Labor implementing essentially the same measure, the opposition has accused the government of hypocrisy. Dutton remarked that it was "interesting" that Chalmers was absent from the announcement, given his prior criticism of the initiative.
Housing Minister Clare O’Neil defended the policy shift, stating, "This isn’t a silver bullet, because there is no silver bullet. But this is an important piece of Labor’s absolutely massive housing agenda."
A Time-Sensitive Opportunity for Foreign Investors
For foreign investors, the coming weeks represent a crucial window of opportunity. While new developments remain open for purchase, those looking to buy existing homes must complete transactions before April 1, 2025, to avoid being locked out of the market for two years.
Foreign investors considering Australian property should work with real estate professionals to expedite purchases and navigate regulatory requirements before the deadline. Given the anticipated surge in demand from overseas buyers rushing to beat the ban, competition for existing properties is expected to intensify in the short term.
Government’s Additional Housing Measures
Beyond the foreign investor ban, Labor is pushing forward with a broader housing strategy, including:
The Housing Australia Future Fund (HAFF): Financing social and affordable housing projects.
First Home Buyer Assistance Scheme: Providing grants and stamp duty concessions for local first-time buyers.
Build-to-Rent Incentives: Encouraging large-scale rental developments to ease rental market pressures.
Crackdown on Land Banking: Increasing scrutiny of vacant land holdings to ensure timely development.
The government has also committed $1.4 million annually to the Australian Taxation Office (ATO) to enforce the foreign investor ban and improve screening of investment proposals. Treasury and the ATO will receive further funding to audit and prevent land banking.
Public and Market Reactions
While some prospective homebuyers welcome measures to limit foreign competition, others view the ban as largely symbolic. For retirees and low-income renters, the broader housing crisis remains a pressing concern, with rental stress worsening in recent years. Experts stress that increasing housing supply is the most effective long-term solution.
In the short term, however, foreign investors still have an opportunity to buy before the deadline. With heightened interest and potential market shifts, overseas buyers looking to invest in Australian property should act now before the window closes on April 1, 2025.