Is ban on foreign purchases doing its job, or hurting housebuilding targets?
Chinese investors are on track to spend roughly $1 billion on Australian homes this financial year — one-thirtieth of their 2015–16 peak — as the federal government extends its ban on foreign purchases of established dwellings to June 2029, according to data from the Foreign Investment Review Board (FIRB).
FIRB figures show Chinese buyers have sought to acquire 638 homes worth a combined $800 million since the start of the 2025–26 financial year on 1 July 2025. In the first quarter of 2026 alone, they targeted $200 million worth of properties. In the 2015–16 financial year, Chinese investors sought to purchase $31.9 billion in Australian homes — by far the largest single-year total ever recorded for any foreign cohort, realestate.com.au highlighted in recent insights.
The broader foreign investment picture reflects the same decline. Only $3.7 billion in offshore capital has been committed to Australia’s residential housing market so far this financial year, covering 2,326 homes requiring government approval. At its peak in 2015–16, the global total reached $72.4 billion, with Chinese buyers accounting for 29% of all foreign investment — the largest single category in FIRB data.
Foreign capital retreat raises industry alarm
Industry experts said the retreat of Chinese capital poses risks for housing affordability and supply. Jacob Caine, president of the Real Estate Institute of Australia (REIA), highlighted that the trend carried broader consequences.
“It’s important to remember that foreign investment in the Australian housing market is invaluable in helping to underpin adequate supply and contributing to controlling affordability,” Caine said.
“Whilst government restrictions on foreign investment in theory contribute to a more level playing field for Australian residents, in practice they undermine housing affordability targets and the ultimate goal of an equitable housing system.”
Caine cited Victoria’s experience as evidence of foreign investment’s potential. The state attracted roughly $28 billion in the 2016 financial year — the largest share nationally — which he said underpinned significantly stronger growth in housing supply than in other parts of the country.
“And the result of that overperformance was more affordable housing, cheaper rent and a market that better serviced Victoria,” he said.
Nerida Conisbee, chief economist at Ray White, said the experience of the past decade offered a preview of what could follow as governments tightened restrictions on domestic investors as well.
“They have been trying to discourage it for a long time now,” Conisbee said of restrictions on foreign buyers. “But the only time we got close to building 1.2 million homes over five years was a period when we had significant foreign investment. Provided you harness it in the right way, it can be effective for getting homes built.
Conisbee warned that recent federal budget measures had already dented domestic investor confidence, noting that investors now knew they would not be able to resell to another investor.
“People don’t understand the role money plays in creating housing,” she said. “They’re now trying to discourage local investors. Who else is going to provide the funding?”
Policy restrictions reshape buyer activity
Multiple policy layers have driven the decline in Chinese investment. On 1 December 2015, Australia restricted foreign buyers to purchasing new homes only. In April last year, the government introduced a temporary ban on foreign purchases of established dwellings, initially set to run until 31 March 2027. In the 2026–27 federal budget, that ban was extended to 30 June 2029, according to the Australian Taxation Office.
State governments have added further pressure through foreign buyer surcharges of 7% to 9% on residential property purchases, while Chinese capital controls continue to restrict the flow of money overseas.
Australia’s ATO Register of Foreign Ownership shows that, of more than 40,000 residential properties held by overseas interests and acquired between 2016 and 2024, 67% are linked to buyers from mainland China.
Taiwan was the second-largest foreign buyer so far in the 2025–26 financial year, with 285 purchase attempts worth approximately $400 million, followed by Vietnamese investors with 237 homes worth around $200 million. Indonesia, Hong Kong and India each accounted for roughly $100 million in proposed purchases over the same period.
