The Australian Government has announced a two-year ban on foreign investors purchasing existing residential properties in an effort to ease housing supply pressures.
This policy change is set to take effect from April 1, 2025 to March 31, 2027, and is part of the current Labor government’s broader strategy to make housing more accessible for local Australian buyers.
Key Details
Treasurer Jim Chalmers and Housing Minister Clare O'Neil confirmed the ban in a joint statement, noting that the government would review whether it should be extended beyond 2027.
According to O'Neil, the restriction is expected to free up approximately 1,800 properties per year for Australian buyers, a move designed to alleviate some of the challenges faced by prospective homeowners.
Addressing Housing Supply And Cost Of Living
Housing affordability has become a major concern in Australia, with dissatisfaction reaching record levels last year. Rising property prices and cost-of-living pressures have made homeownership increasingly difficult, and this issue is expected to be a focal point in the upcoming 2025 general election.
To further address these challenges, the Labor government has introduced several housing reforms, including a shared equity scheme and tax incentives for developers, which we've discussed in previous articles. These initiatives aim to boost supply and contribute to the goal of constructing 1.2 million new homes by 2030.
Impact On The Property Market
The ban on foreign investors purchasing existing homes could have various implications for the Australian real estate market:
Increased Availability for Local Buyers
With fewer foreign investors competing for properties, more Australians may have opportunities to enter the housing market.
Potential Stabilisation of Prices
Reducing external demand could slow price increases, particularly in high-demand urban areas.
Investor Shift to New Developments
Foreign investors may turn their attention to new housing projects, potentially increasing additional construction and development projects.
Legal Considerations For Buyers And Investors
For those navigating the property market, it is crucial to stay informed about legal implications and regulatory changes. Whether you are a local buyer looking to purchase a home or an investor seeking alternative opportunities, understanding the impact of this ban is essential.
At RHC Solicitors, we provide leading property law services led by decades of local conveyancing experience. We are well-equipped to help buyers and sellers through the complexities of a conveyance. If you haven't already, we recommend reading our recent article where we discuss FIRB and AFAD for foreign purchasers, and recent changes to the First Home Buyer Concession. Of course, if you have questions about property transactions, or want to learn more about how we can help, don't hesitate to contact our team today.
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication is that of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.
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