Coalition push to curb foreign home ownership in Australia

As the nation’s peak residential housing body backs a Coalition super-for-housing plan, MPs press for higher taxes or an outright ban on overseas buyers.

Peter Dutton is facing an internal push from Coalition MPs to curb foreign investment in Australian housing as the party considers its housing policy ahead of the next election. Picture: NCA NewsWire / Martin Ollman

The nation’s peak residential housing body has thrown its support behind a Coalition push to allow Australians to tap into their nest egg to purchase a home, as Peter Dutton faces an internal push from Coalition MPs to curb foreign investment in Australian residential property in a bid to ease the nation’s housing crisis.

The Housing Industry Association is calling on Labor to consider enabling first home buyers to use their superannuation to buy a home, warning the government must “leave no stone unturned to look to ease the burden on first home buyers”.

“Home ownership is the most important form of security in retirement. Superannuation is not working at its best if an individual is using super to rent in their old age,” HIA managing director Jocelyn Martin told The Australian.

As the opposition considers making housing affordability a central element of its election pitch, The Australian understands calls are growing within the Coalition party room for the Opposition Leader to announce an intention to crackdown on foreign investment in residential property ahead of the next election.

Housing is expected to be a major feature of Mr Dutton’s pitch for the prime ministership, with Coalition MPs expecting planning reforms and unlocking superannuation for deposits to be in a package unveiled before the election.

Jim Chalmers on Sunday announced plans to increase taxes on foreign home buyers to ease housing pressures and increase stock. Picture: NCA NewsWire / Martin Ollman

The push to curb foreign ownership — which could include more taxation on foreign investors or an outright ban on home sales to overseas buyers — has some support within shadow cabinet but has not yet been ticked off by the party’s expenditure review committee, The Australian understands.

While overseas investors are limited to purchasing only newly constructed dwellings, Coalition MPs pushing for the crackdown say the housing shortage means foreign investment is not needed to encourage construction in the sector.

Ahead of the release of Labor’s 10-year migration strategy, Jim Chalmers on Sunday announced plans to increase taxes on foreign home buyers to ease housing pressures and increase stock.

The Treasurer unveiled a suite of measures including tripling foreign investment fees for established homes, doubling vacancy fees for foreign owned homes and substantially boosting compliance.

Nationals Leader David Littleproud on Sunday called for an outright ban on foreigners buying residential homes, arguing Australians should have first priority on buying homes in Australia.

“I don’t understand why we’re just not banning or suspending foreigners from buying residential homes for them to live in,” Mr Littleproud told Today.

“While we have a housing crisis, Australians should get a priority on buying homes in Australia. We’ve got a supply issue.”

Liberal backbencher Keith Wolahan suggested foreigners should not be able to lock up their money into Australian housing.

Nationals leader David Littleproud on Sunday called for an outright ban on foreigners buying residential homes. Picture: NCA NewsWire / Martin Ollman

“We need to ask ourselves if the Australian residential property market is just another asset class,” Mr Wolahan said.

“As a key driver of intergenerational equity it shouldn’t operate as an alternative to a safety deposit box.”

Liberal MP Warren Entsch said foreign investment in residential property needs to be reviewed.

“At the end of the day we have a priority for Australians and we have a housing crisis at the moment,” Mr Entsch said.

“Overseas investors are coming here and snapping up the market purely for investment.

“It is jacking the prices up to the extent that average Australians can’t afford it. We need to review it.”

A crackdown on foreign buyers is also supported by Queensland Coalition MPs Gerard Rennick and Llew O’Brien.

“It is certainly something I support,” Mr O’Brien said. “My kids are trying to get into the housing market and it is just so difficult.”

Herbert MP Phillip Thompson said he would support measures to make it easier for Australians to buy homes than foreign investors.

“Whatever encourages Australians to get into the market first as a priority I would support that,” he said.

However, Mr Dutton will face resistance for any policies that could appear racist given the electoral backlash over Scott Morrison’s attacks on China ahead of the last election.

Non-Australian residents are already subject to laws restricting them to buy Australian property that is either new buildings or vacant lots, with the existing supply-side policy designed to help increase overall housing stock.

Foreign investors spent about $2.4bn on properties in 2021-22 which makes up less than one per cent of residential property in Australia traded over the period.

In 2021-22, there were 588,176 sales of residential dwellings in Australia of which 4355 were to overseas buyers.

Former prime minister Scott Morrison cracked down on the sale of agricultural farmland to overseas buyers in 2017 as treasurer under the Turnbull government.

Opposition immigration spokesman Dan Tehan recently said it was time to look at banning foreigners from buying homes in Australia amid concern young people could not afford to buy or rent property.

While the party is not expected to announce its housing policy soon, senior Coalition sources criticised how late the party’s centrepiece housing policy was announced in the lead up to the last election.

Mr Morrison announced the party’s Super Home Buyer scheme at its campaign launch in Brisbane — just six days out from when voters went to the polls — outlining a plan to allow first home buyers to tap into their nest egg to purchase a property.

“I don’t think we will be dropping big housing policies six days out like we did last time. I was pushing hard for it to be announced early, six days is just not enough of a runway,” one source said.

But some sources within the Coalition said there was some hesitation to proceed with banning foreign ownership outright amid concern it could stifle new development.

“If you have a project which requires pre-sales and you need 60 per cent pre-sale before construction finance, the 10 per cent you sell offshore could be the difference between meeting its finance hurdle … it could have negative consequences,” the source said.