‘Gift for Australia’: $1.3 billion worth of home sales gain foreign investor approval in Q1 2025
Foreign investors from China continue to buy hundreds of millions of dollars worth of homes in Australia ahead of a two-year ban.
Foreign investors from China continue to buy hundreds of millions of dollars worth of homes in Australia with the country seen as “friendlier” amid uncertainty over US President Donald Trump’s policies.
The latest figures published by Treasury’s Foreign Investment Review Board (FIRB) on Tuesday, covering the first three months of the financial year, show 1123 purchases totalling $1.3 billion were approved between July 1 and September 30.
China was the largest source by value for approved residential real estate investment with $400 million, followed by Hong Kong, Taiwan, Vietnam and Indonesia, each with $100 million.
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Daniel Ho, co-founder and group managing director of Chinese property portal Juwai IQI, said with the “political uncertainty” in the US, “Australia looks like a much friendlier country”.
“They are purchasing for their children who they expect to attend school in Australia, or for themselves in advance of obtaining permanent residency,” Mr Ho said in a statement.
“China’s slower economy is behind some of these transactions. Parents see their children struggling in hyper-competitive schools for too few university places, and then they see that the job market after they graduate with a degree won’t be great.
“High school students in China may spend 65 to 77 hours a week studying, including school hours and homework, and some parents would rather their children have a more Australian-style childhood. They want their children to also have friends, to do sports, to learn to swim.”
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Mr Ho argued “these families are a great gift for Australia”.
“They bring international connections, a pattern of hard work and a desire to make a difference in their new home,” he said.
Foreigners without Australian citizenship or permanent residency can only purchase new homes unless approved by Treasury, but even foreigners purchasing new homes must pay hefty fees to the FIRB.
In the full 2023-24 financial year the FIRB approved $6.6 billion worth of residential real estate investment, down from $7.9 billion in 2022-23.
Earlier this month the Albanese government announced a two-year ban on foreign investors buying established homes starting from April 1.
“This is all about easing pressure on our housing market at the same time as we build more homes,” Housing Minister Clare O’Neil and Treasurer Jim Chalmers said in a joint media release.
“The ban will mean Australians will be able to buy homes that would have otherwise been bought by foreign investors.”
The government said it would also crack down on foreign investors “banking” vacant land, not developing it as required under the rules and then selling it for a profit after prices rise.
Immigration and housing affordability are looming as major issues ahead of the federal election, which will be held some time in the next three months.
A survey last year by the University of Technology Sydney (UTS) found Australians overwhelmingly support a crackdown on Chinese investors buying real estate.
Sydney-based real estate agent Fiona Yang from Plus Agency said the latest FIRB figures covered the strong spring selling season when the best projects, including those marketed at foreign buyers, typically come onto the market.
Ms Yang said Plus Agency launched The Hampton at Hornsby, a luxury townhouse development on Old Berowra Road, in August and sold all five homes in the first stage for as much as $2 million each.
She predicted the two-year ban would drive a surge of foreign buyers in early 2025, “so you will have a significant increase in FIRB transactions as they want to catch the last train”.
“They worry that this is their last chance to buy,” Ms Yang said in a statement.
“Now, it is true the letter of the law doesn’t ban purchasing of new homes, but many buyers only see the headline. Also, many unscrupulous agents are using the ban as a selling point to urge buyers to move quickly.”
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