Foreign investors will soon be banned from purchasing established homes in Australia as part of the Albanese government's efforts to ease pressures in the housing market.

From 1 April 2025 to 31 March 2027, foreign buyers, including temporary visa holders and foreign-owned companies, will no longer be allowed to purchase existing homes, except in limited cases.

These limited exceptions will apply to investments that substantially boost housing supply or enhance housing availability, as well as those related to the Pacific Australia Labour Mobility (PALM) scheme.

The Albanese Government states the goal of the ban is to reduce competition in the housing market and increase homeownership opportunities for Australians. 

The government will review the ban in 2027 to decide whether it should be extended.

How Will This Impact Temporary Residents?

Currently, temporary residents are allowed to buy one established home if they use it as their primary residence. Under the new rules, many long-term temporary visa holders, such as those on 491 visa or 494 visa, will now face major restrictions on property ownership.

This change may increase demand for rental properties, as temporary visa holders who previously would have purchased homes will now compete for rentals instead.

What Do These Changes Mean for Foreign Investors?

The new policies will make it more expensive and difficult for foreign investors to buy property in Australia, particularly established homes. However, investing in new developments that contribute to housing supply may still be possible under certain conditions.

The government states the two-year ban is designed to prioritise homeownership for Australians while ensuring that foreign investment benefits the housing market. With stricter regulations and higher fees, these changes are expected to impact property prices, rental markets, and investment trends.

Sources: 

https://ministers.treasury.gov.au/ministers/clare-oneil-2024/media-releases/albanese-government-clamping-down-foreign-purchase