The Australian government will block foreign investors and temporary residents from purchasing existing homes for two years starting April 1, a move officials claim will free up housing stock for locals amid a worsening affordability crisis.
Treasurer Jim Chalmers and Housing Minister Clare O’Neil announced the policy Sunday, framing it as part of a broader effort to prioritize homeownership for Australian citizens, particularly younger generations struggling to enter the market.
The ban, effective until March 31, 2027, prohibits foreign-owned entities and non-citizens from buying established homes but exempts purchases of newly constructed developments with 20 or more units. Data from Australia’s Foreign Investment Review Board (FIRB) shows foreign buyers acquired just 5,360 residential properties in 2022–23, totaling 4.9 billion AUD ($3.1 billion USD)—less than 1% of total sales. Most transactions involved new builds or vacant land, which remain unaffected by the restrictions.
Critics argue the policy addresses a marginal contributor to Australia’s housing shortage, which stems from chronic undersupply, soaring construction costs, and population growth. Median home prices have nearly doubled in major cities over the past decade, while rental vacancy rates hover near record lows. O’Neil acknowledged the ban alone won’t “fix the crisis” but insisted it would redirect thousands of properties to domestic buyers. “We need to orient the entire efforts of government around housing security for Australians,” she told Sky News Australia, emphasizing homeownership as a priority ahead of elections due by May 2025.
Analysts note the announcement carries political undertones, with housing affordability emerging as a key voter concern. The center-left Labor government faces pressure to counter opposition claims of inaction, even as experts question the ban’s practical impact. “Foreign investment rules have always favored new housing supply,” said economist Angela Jackson, adding that the policy “symbolically targets outsiders” while doing little to expand affordable stock.
The decision follows similar measures in Canada and New Zealand, where foreign buyer bans have yielded mixed results. With Australia’s housing construction lagging demand by an estimated 100,000 homes annually, advocates urge deeper reforms, including tax incentives for builders and stricter rent control policies. For now, the government’s focus remains on redirecting existing supply—a band-aid solution for a crisis needing surgery.
