Australian Government Announces Ban: Foreigners Prohibited from Buying Existing Homes for Two Years Starting April 1, with Possible Permanent Implementation – Sydney Auction Clearance Rate at 75%

Week’s Key Focus

According to The Australian Financial Review, the Australian federal government has announced a new real estate policy prohibiting foreign investors and temporary residents from purchasing existing homes between April 1, 2025, and March 31, 2027. The government will also crack down on foreign investors who hoard residential land. Foreigners have already faced strict restrictions on buying existing homes in Australia, with purchases only allowed under limited circumstances. However, the new ban means that for the next two years, even those residing in Australia temporarily for work or study will be entirely prohibited from purchasing existing properties. The Labor government has also indicated that it is open to extending or permanently implementing the ban, with a policy review scheduled during the two-year prohibition period to assess the need for further restrictions.

To ensure compliance, the government has allocated $5.7 million AUD to the Australian Taxation Office (ATO) for enhanced enforcement measures. Data from the 2022-23 financial year shows that foreign investors purchased 5,360 residential properties across Australia, totaling $4.9 billion AUD in value. Of these transactions, 34% involved existing homes, with Victoria (458 transactions), Queensland (403), South Australia (313), and New South Wales (165) being the most active markets. The Labor government stated that Australia is currently facing a housing crisis driven by population growth, slow approval processes, and a construction labor shortage, while rising housing and living costs have become key concerns for voters. The government previously pledged to build 1.2 million homes over the next decade to address supply shortages. However, according to a Deloitte Access Economics report from last year, at the current construction rate, fewer than 1 million new homes are expected to be completed—well below the government’s target.

The Liberal Party had already proposed a more stringent housing policy, pledging to extend the ban on foreign buyers if elected and freeze national building regulations for 10 years to reduce development costs and speed up approvals. Additionally, the party plans to allow first-time homebuyers to withdraw up to $50,000 AUD from their superannuation for a home deposit and allocate $5 billion AUD toward housing-related infrastructure projects. Liberal Party leader Peter Dutton criticized the current housing policy, arguing that it has failed to address affordability and that stronger measures are needed to prioritize homeownership for Australian residents.

In an interview with The Sydney Morning Herald, Housing Minister Clare O’Neil acknowledged that foreign buyers represent a small portion of the market but stressed that the government must do everything possible to ensure young Australians can afford a home. When asked whether the policy was a copy of the Liberal Party’s proposal, O’Neil dismissed the claim, stating that the Coalition government had “done nothing to address the housing crisis” during its time in office. The introduction of this foreign buyer ban by the Labor government is widely seen as an effort to avoid a political battle with the opposition on housing policy. As the federal election approaches, which party can better tackle the housing crisis is expected to be a key issue for voters.

Sydney Parkfront Terrace

Auction Results Last Week

Sydney: 1,042 properties went to auction, with 646 results reported. A total of 482 properties were sold, achieving a clearance rate of 75%. The total auction value was $520,852,500 AUD, with a median sale price of $1,535,000 AUD.
Melbourne: 831 properties went to auction, with 604 results reported. A total of 422 properties were sold, achieving a clearance rate of 70%. The total auction value was $326,616,865 AUD, with a median sale price of $912,500 AUD.