Anthony Albanese’s foreign buyers ban won’t help housing crisis

Anthony Albanese’s government claims his foreign buyer ban is an ‘important move’ to tackle the housing crisis but experts say it won’t likely make any difference.

OPINION

The recently announced two-year ban on foreigners buying existing homes is more about doing something at the margins, maybe even dog whistling, than achieving actual outcomes that help housing supply.

Local residents who perceive foreigners have been snapping up their neighbour’s weekend auction listings will likely think that our welcome mat has been taken away.

The federal government’s temporary ban on foreigners buying established houses will be in effect from April 1 until March, 2027, after which there will be a review.

Of course foreigners have generally been barred from buying existing property, except in limited circumstances, such as when they come to live here for work or study.

So foreigners account for a very small fraction of owners across Australia, sitting about 2 per cent.

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Albo’s housing plan won’t likely make much difference Picture: NewsWire/ Steve Pohlner

Nonetheless Housing Minister Clare O’Neil described it as “an important move”.

“It’s not a silver bullet to the housing crisis, because there is no silver bullet,” O’Neil says.

“But I really firmly believe that given the housing pressures that Australians are facing today, we need to orient the entire efforts of the Australian government around security of housing for Australians.”

In the meantime expect a brought-forward spurt in the market until April 1 from foreigners.

Fiona Yang at Plus Agency, the new homes project marketing agency with more than $300m in annual sales, says the ban was already triggering a “significant increase in FIRB transactions as they want to catch the last train”.

“They worry that this is their last chance to buy,” she says.

“It is true the letter of the law doesn’t ban purchasing of new homes, but many buyers only see the headline.”

Saxon Davidson, research fellow at the Institute of Public Affairs, notes these international investors “are a drop in the ocean compared to the demand effect that record, out-of-control migration has on Australia’s housing shortage.”

Global Sino real estate agency Juwai IQI co-founder Daniel Ho reckons the ban will hit about 1600 property transactions annually.

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The ban will hit just 1600 housing sales every year.

That is not even one combined super Saturday auction tally in Sydney and Melbourne.

Of 520,000 home sales a year in Australia, fewer than 5000 go to foreign buyers, and Ho calculates just a third are existing homes.

O’Neil, who announced the ban in January with Treasurer Jim Chalmers, puts it at 1800 sales.

The Coalition announced a similar policy last year, which the Albanese government then noted would make little difference to supply and housing prices.

So the ban is imminent for the meantime irrespective of the election result.

Juwai’s Ho says “buyers from China still love Australia.”

“These families are a great gift for Australia,” Ho says.

“They bring international connections, a pattern of hard work, and a desire to make a difference in their new home.”

Real estate observers have detected the pattern of their buying has changed since the pandemic.

Australia does not have the issues of Chinese coming, buying and then leaving their purchases empty.

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Originally published as Anthony Albanese’s foreign buyers ban won’t help housing crisis