The Australian government has announced a two-year ban on foreigners purchasing homes on the secondary market, effective from April 2025 until March 2027. The measure is part of a broader effort to address rising property prices and increase housing availability for local buyers.
While the decision has sparked debate over its potential impact, property experts suggest that foreign buyers constitute only a small fraction of the overall market. Developers and analysts believe that the policy is unlikely to cause major disruptions but could redirect investment towards new housing projects, according to The Edge Malaysia.
Foreign Buyers Play a Minor Role in Housing Price Increases
Despite concerns about foreign investment driving up property prices, experts argue that its influence has been relatively limited. According to Adrian Yeoh, executive director for international projects at Knight Frank Property Hub, the primary factors behind price increases include low interest rates, population growth, and construction delays.
Between 2013 and 2023, Brisbane’s median house price nearly doubled from AUD 451,000 to AUD 885,500, while Melbourne saw an increase from AUD 634,921 to AUD 1,261,070. However, foreign buyers accounted for only 1,800 of the 520,000 housing transactions recorded in Australia during 2022-2023, according to data from CoreLogic.
Leigh Warner, head of residential research at JLL Australia, notes that foreign buyers are often seen as a scapegoat for rising housing costs, despite making up a small portion of total transactions. He emphasises that the real issue lies in insufficient housing supply rather than external investment.
Developers See Opportunities Despite the Restriction
Property developers operating in Australia do not foresee significant setbacks due to the ban, as it applies only to resale properties and not new developments. Many industry players believe that the measure could instead encourage foreign investors to focus on new housing projects, providing a boost to the construction sector.
UEM Sunrise, which is involved in projects in Perth and Melbourne, views the restriction as an opportunity to steer investment towards new builds. Setia (Melbourne) Development Co Pty Ltd shares a similar perspective, anticipating increased interest in off-the-plan properties.
According to See Hunt Soon, a director at Setia (Melbourne) Development, a recent interest rate cut by the Reserve Bank of Australia could further stimulate the property market, making homeownership more accessible. The central bank reduced its cash rate from 4.35% to 4.1%, marking its first cut in five years, a move that is expected to encourage buyers.
Implications for Australian Homeowners and Investors
For Malaysians who already own property in Australia, the ban is not expected to have a direct impact. However, property analysts suggest that the reduced presence of foreign buyers in the resale market could lead to stabilised prices or slight declines in certain areas.
Adrian Yeoh of Knight Frank Property Hub highlights that demand for rental properties could increase as some foreign investors may opt to rent instead of purchasing resale homes. This shift could create new opportunities for landlords and long-term investors.
