Australia will ban foreign investors from buying existing homes for two years to address soaring property prices in the country.
The move is part of the government’s election pitch as housing affordability becomes a major issue, especially for young voters.
Housing minister Clare O’Neil said in a statement on Sunday that foreign investors – including temporary residents such as international students and foreign-owned companies – will be restricted from buying houses from 1 April 2025 to 31 March 2027. The restriction will then be reviewed to determine whether it should be extended.
The minister said the policy would “free up thousands of properties for Australians”.
“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 said.
Opposition leader Peter Dutton initially introduced the policy in his budget reply last year.
“They absolutely bucketed this policy for the last 12 months and now five minutes before the election they copy it,” opposition housing spokesman Michael Sukkar was quoted as saying by Nine News Australia.
Meanwhile, the government will also tighten rules on land banking, requiring foreign investors to develop vacant land within a set timeframe. Ms O’Neil said there was a need to prioritise home ownership for young Australians.
“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.”F
The ban is expected to have little impact on prices, as foreign buyers make up a small share of the market. In 2022-23, foreign investors made 5,360 residential property purchases, with only a third involving existing dwellings.
To ensure enforcement, the tax office will receive additional funding. With elections due by 17 May, both major parties are prioritising housing affordability.
“We’re coming at this housing challenge from every responsible angle,” Ms 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.
“It’s a minor change, but a meaningful one because we know that every effort helps in addressing the housing challenge we’ve inherited.”
