Foreign buyers are retreating from Australia’s property market, with approved residential real estate investments dropping by 15% in the 2024 financial year, Domain reported.
According to the Foreign Investment Review Board (FIRB), approvals fell from 6,576 in 2023 to 5,581 in 2024. The combined value of purchases by Chinese and Hong Kong buyers, traditionally the largest foreign investors, also declined from $4 billion to $3 billion.
The cost of purchasing property as a foreigner in Australia has become prohibitive.
“Foreign buyers pay much more to purchase and to hold property in Australia than local residents and citizens,” Daniel Ho, co-founder of Juwai IQI, told Domain. “They have extra taxes, fees, and duties that local buyers don’t have to worry about.”
In Sydney, foreign buyers face a stamp duty surcharge of 8%, rising to 9% next year, and an annual land tax surcharge of 4%, increasing to 5%. These charges add significantly to property costs, particularly for high-value transactions.
Peter Li of Plus Agency noted that even wealthy buyers are discouraged.
“Even if you could afford to buy it, you have to be able to afford to keep it, and that’s why people are selling,” Li said.
Australia’s restrictions on the types of properties foreign buyers can purchase have also reduced demand. Buyers without permanent residency are limited to new builds or off-the-plan sales.
“The government’s attempts to disincentivise foreign investment are working,” Henny Stier of OH Property Group told Domain.
Migration cuts and delays in obtaining permanent residency are further discouraging buyers.
“Many overseas buyers are waiting until they qualify for permanent residency to avoid the hefty fees,” said Robert Ding of Belle Property Balwyn.
AMP chief economist Shane Oliver (pictured above) believes the current downturn reflects a return to pre-pandemic levels after a temporary post-COVID housing boom.
“Foreign buying was weak during the pandemic due to travel restrictions. There was a bounce back, but now it’s settling down,” Oliver said.
With stricter regulations, high fees, and reduced migration, foreign buyers are leaving Australia’s property market, leaving developers and high-end markets searching for new opportunities, Domain reported.
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