In February this year, the Australian Government announced temporary bans on purchases by foreign individuals (including temporary residents) and foreign-owned companies on established dwellings for at least 2 years.
The reason for this ban is so pressure on the housing market eases for Australians as competition decreases and affordability increases, as well as freeing up 1,800 homes annually for local buyers.
Banning purchases of existing dwellings by non-Australians means foreign capital will be directed towards new developments, as this money assists with the national goal of building 1.2 million new homes in Australia by 2030.
In line with the bans, Australian states continue to impose hefty stamp duty costs to deter foreign investors away from purchasing real estate within Australia. Forecasters indicate short-stay rentals and the holiday home sector will be impacted as foreigners are forced to pivot away from purchasing existing homes to use as investment properties.
Foreign investors must now invest in new home builds or developments where they are obligated to build at least 20 homes, or commercial housing ventures to qualify for the purchase.
Download the Guide
The strategies Melbourne’s most prepared buyers use to secure property at the right price.
While the impact on the Australia housing market may not be overly significant due to foreign investors historically targeting high-end properties, we do expect to see more affordability for every day Australians looking to buy a first home, family home, or investment property.
However, the ban means that the absence of foreigners competing for every day homes should increase local buying power, as prices aren’t pushed up to unattainable levels by investors competing to add more property to their investment portfolios. Instead, Australians will compete against each other, leading to more stable sale prices and more accurate price forecasting over the next two years while the ban remains in place.
Real estate agents and buyer’s advocates will have to ensure they’re doing their due diligence on all interested parties wanting to bid or make an offer to purchase an existing dwelling in line with the Foreign Investment Review Board guidelines to see if potential purchasers qualify to buy the home.
With housing being the largest contributor to the rising cost of living, dissatisfaction was at an all-time high in 2024, and these bans are part of the broader agenda to make housing purchases more accessible for Australians.
At Bayside Real Estate Advocates, we’re up to date on all relevant guidelines and laws for buying and selling property, and we’ll take the stress out of the process for you. If you’re ready to purchase a home in 2025, get in touch today.
