Australia Imposes Two-Year Ban on Foreign Home Purchases

In a significant policy shift aimed at addressing Australia’s housing affordability crisis, the federal government has announced a two-year ban on foreign investors purchasing existing residential properties. This measure, set to commence on April 1, 2025, and conclude on March 31, 2027, seeks to increase the availability of homes for Australian residents amid escalating property prices and rental costs.

The decision to implement this ban has arisen  from growing public concern over housing affordability and availability.

Housing Minister Clare O’Neil acknowledged that while the ban is not a comprehensive solution, it is a crucial component of the government’s  housing agenda. She stated, “This isn’t a silver bullet, because there is no silver bullet,” she said. “But this is an important piece of Labor’s absolutely massive housing agenda.”

The policy mirrors a similar proposal introduced by Opposition Leader Peter Dutton in May 2024. At that time, Treasurer Jim Chalmers criticised the opposition’s plan as “unhinged.” However, the government’s adoption of this measure indicates a bipartisan acknowledgment of the need for decisive action on housing affordability.

What Will the Ban Do to House Prices?

According to the ATO, foreign buyers accounted for 5, 360 residential real estate purchases in the last year in which this data is available (2022-23) This suggests that removing them from the market is unlikely to have a dramatic impact on prices.

While the ban on foreign buyers may have limited direct impact on prices, it signals a broader political push to address housing concerns. With housing affordability set to be a key issue in the upcoming federal election, both major parties are positioning themselves as willing to take decisive action.