Australia to ban foreign purchase of built homes

Australia will impose a two-year ban on foreign investors purchasing existing homes, starting April 1, in a bid to ease housing supply pressures and improve access to affordable dwellings for local residents.

Housing and Homelessness Minister Clare O'Neil and Treasurer Jim Chalmers announced the policy in a joint statement on Sunday, confirming that the ban will remain in effect until March 31, 2027.

It will apply to all foreign nationals, including temporary residents on work or student visas. The government will assess the policy's effect after two years, with the possibility of extending or making the ban permanent.

However, experts said foreign buyers are not the main factor in Australia's housing shortage, which is expected to persist.

Michael Yardney, founder of Metropole Property Strategists, an Australian real estate company, cited Australian Taxation Office data from the financial year 2022-23, showing that only about 1,800 of 5,360 foreign-owned residential purchases were established dwellings — a minor fraction of the market he described as "a drop in the ocean".

Yardney also addressed the persistent issue of housing undersupply, saying all commentators agree on the challenges ahead. "There is no way we're going to hit the housing construction targets required to meet our demand," he said.

The Australian government has struggled to tackle the crisis. The latest housing ban is part of a broader strategy that includes tax incentives for developers and shared equity programs, aiming to build 1.2 million new homes by 2029.

High prices

Beyond housing shortages, high property prices remain a major concern in Australia, with some believing that Chinese investors have had a certain effect on local housing prices.

However, Shi Song, an associate professor in property economics at the University of Technology Sydney, offered a different view in his report titled "How much did Chinese investors drive up Sydney home prices?".

The research found that while Chinese investors have some influence on prices, the effect is far smaller and more limited in scope than many believe. In Sydney, the areas where Chinese buyers have had a noticeable effect on prices are primarily suburbs with high Chinese populations.

Shi said foreign investment should be welcomed if it contributes to boosting Australia's housing supply.

xinxin@chinadaily.com.cn