Australia to ban foreigners from buying existing homes as elections loom

The Australian government will ban foreign investors from buying established homes in the country for at least two years, as part of its pledge to address a shortage of affordable housing in the lead up to the country's elections.

Clare O’Neil, Australia's housing minister, announced the ban in a statement on Feb. 16.

The ban

The ban will take effect from Apr. 1, 2025 and prevent foreign investors, including foreign-owned companies and temporary residents such as international students, from purchasing established homes in the country.

These refer to residential dwellings that are not new homes.

The ban is set to last till Mar. 31, 2027. A review will then be conducted to determine if it should be extended.

On the policy, O’Neil said that the government aims to secure home ownership for more young Australians, reported The Guardian.

Although foreign investors are currently barred from buying existing homes, there are exceptions such as when moving to Australia for work or study.

From Apr. 1, they will be completely barred from doing so, except for limited cases such as investments that "significantly increase housing supply", and for the Pacific Australia Labour Mobility (PALM) scheme, the statement read.

O'Neil said that Australia's tax office would be provided extra funding to enforce the ban.

The government also intends to crack down on foreign investors who acquire vacant land in Australia with an eye on selling it for a profit instead of developing it.

Housing a hot topic for elections

The move comes as Australia's Labour government and opposition prepare for a 2025 election where housing affordability and cost-of-living issues have increasingly resonated with voters.

According to Bloomberg, Australian property is some of the least affordable in the world, leading to many residents feeling that home ownership is impossible.

Foreign buyers spent AUD$4.9 billion (S$4.16 billion) on residential properties in Australia across 5,360 purchases from 2022 to 2023, based on figures from the Foreign Investment Review Board.

The foreign ownership ban notably mirrors a proposal made by opposition leader Peter Dutton in May 2024, ABC News reported.

However, the ban will only affect less than 0.4 per cent of the housing market, which calls into question its efficacy, according to The Guardian.

“This isn’t a silver bullet, because there is no silver bullet,” O'Neil said on the matter.

“But this is an important piece of Labor’s absolutely massive housing agenda.”

Australia's federal election must be held by May 17, 2025.

Top image from Canva