The Australian government will ban foreign buyers from purchasing existing homes for two years. This move aims to control rising property prices and is a key part of its election strategy. On Saturday, Housing Minister Clare O’Neil announced the decision. Starting April 1, the ban will remain in place until March 31, 2027.
After that, officials will review the policy and decide whether to extend it. Speaking on ABC News, O’Neil emphasized that the ban could free up around 1,800 homes per year for local buyers.
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“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,” she said.
Australia’s Housing Crisis
Notably, Australia has one of the least affordable housing markets in the world. Over the years, property prices have soared, making homeownership difficult, especially for young people. As a result, housing costs have become a major issue in the upcoming election.
For instance, in Sydney, home values have surged nearly 70% in the last decade. According to CoreLogic Inc., the median property price has reached A$1.2 million (US$762,000). Consequently, rental prices have also increased.
However, many experts believe the ban will not significantly lower prices. According to Bloomberg, foreign investors spent A$4.9 billion on Australian residential real estate in the 12 months leading up to June 30, 2023. Interestingly, about one-third of this investment went into existing homes.
Government’s Housing Reforms
Meanwhile, the ban follows other housing reforms introduced by the government. Recently, policymakers introduced a shared equity scheme and tax incentives for developers to increase housing supply. In addition, the government has set a goal to build 1.2 million new homes by 2030.
With elections approaching before May 17, housing remains one of the top three concerns for voters. Ultimately, the government hopes these policies will ease affordability issues and increase housing availability.
