Australia bans foreign investors from buying homes for two years

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The Australian government has introduced a two-year ban on foreign investors purchasing existing homes as part of its efforts to address the country’s housing affordability crisis.

The new restriction, which will come into effect on 1 April 2025, aims to free up properties for local buyers amid growing concerns over soaring property prices, particularly among young voters.

Housing Minister Clare O’Neil made the announcement on Sunday, confirming that foreign investors, including temporary residents such as international students and foreign-owned companies, will be prevented from purchasing houses until March 2027.

The government has stated that this move will be reassessed after the period to determine whether to extend the policy.

O’Neil stated that the policy would help “free up thousands of properties for Australians,” highlighting the government's focus on prioritising homeownership for local citizens, particularly younger generations.

"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," she added.

The government has also announced measures to curb land banking, where foreign investors hold onto land without developing it.

From now on, foreign investors will be required to develop vacant land within a set timeframe, in line with the government's aim of increasing housing supply.

Despite the growing housing pressure, experts suggest that the ban may not have a significant impact on property prices, as foreign buyers account for a relatively small share of the market. In the 2022-23 period, foreign investors made 5,360 residential property purchases, of which only a third involved existing properties.

The policy follows proposals made by opposition leader Peter Dutton, who initially raised the idea in his budget reply. Michael Sukkar, the opposition’s housing spokesman, accused the government of copying their policy "five minutes before the election."

Both government and opposition parties are prioritising housing affordability as elections near, with a strong focus on easing pressure on the housing market while simultaneously increasing supply.

"These initiatives are a small but important part of our already big and broad housing agenda," O'Neil remarked, emphasising that while the restrictions are not a “silver bullet,” they are an essential piece of the government’s plan to address the country’s housing challenges.