Australia bans foreigners from buying homes to tackle surging property prices

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The government plans to ban foreign investors from purchasing existing houses for a couple of years in order to tackle the skyrocketing cost of property in the country.

The decision is part of the government's election platform as housing affordability is becoming a major concern, particularly among young people.

Housing Minister Clare O'Neil said in a statement on Sunday that foreign investors – including temporary residents like international students and companies owned by people from overseas – won't be allowed to buy houses from 1 April 2025 to 31 March 2027. The ban will then be looked at again to see if it should be kept in place.

The minister said the policy would "free up thousands of properties for Aussies".

"Because for 30 years, governments around the country haven't built enough houses for the Australians who need them," she said.

Introduced the policy in his budget speech last year.

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In the meantime, the government will also crack down on land banking, making it compulsory for foreign investors to build on empty land within a specific timeframe. Ms O’Neil explained there's a need to put home ownership at the forefront for young Australians.

“Fair dinkum, there's no magic solution, but this is a ripper of a move for Labor's housing policy,” she said. “But this is a fair whack of Labor's massive housing agenda.”

The ban is expected to have a minimal effect on price, as international buyers make up a small portion of the market. In 2022-23, international investors made 5,360 residential property purchases, with only a third of these involving existing homes.

To ensure enforcement, the tax office will receive extra funding. With elections due by 17 May, both major parties are giving top priority to making housing more affordable.

"We're tackling this housing issue from every responsible direction," Ms O'Neil said in a joint statement with Treasurer Jim Chalmers.

“This is all about easing the strain on our housing market, while we're also working to build more homes.”

“These initiatives are just one part of our already extensive and diverse housing plan, which aims to increase supply and help more people get into homes.”

“Fair dinkum, it's just a small tweak, but it's a ripper of a change because we know every little bit counts in sorting out the housing crisis we've been left with.”

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