ATO data reveals a significant shift in foreign ownership of Australian residential homes
China-based property investors reduced their Australian holdings by more than 1,200 residential properties in a single financial year, while Japan-based investors recorded the sharpest increase.
According to the Australian Taxation Office’s latest release of the Register of Foreign Ownership of Australian Assets, investors from the People's Republic of China owned 22,272 Australian residential properties in the 2025 financial year — down from 23,550 in the 2024 financial year, a fall of 5.4%. Chinese investors still account for more than 55% of all foreign-owned homes nationally.
Given separate Foreign Investment Review Board data showing more than 1,600 purchase approvals were granted to China and Hong Kong residents over the same period, the net reduction implies approximately 2,800 properties were sold by that combined group. Hong Kong-based ownership also fell, from 3,486 to 3,396.
The declines occurred despite a modest overall rise in foreign-owned Australian homes, which increased from 40,177 to 40,460.
The number of Japan-based investors rose 46% from 1,168 to 1,711, making Japan the fifth-largest foreign owner of Australian homes, overtaking both the United Kingdom and the United States. By state, Victoria holds the highest number of foreign-owned properties at 16,403, ahead of New South Wales (9,198) and Queensland (8,465).
Top 20 source countries of foreign investment in Australian residential land
Registered interests in residential land
Source: Australian Taxation Office, Register of Foreign Ownership of Australian Assets
Real Estate Institute of Australia chief executive Jacob Caine (pictured right) linked the Chinese sell-off to property market difficulties in China, but warned of consequences for Australian renters.
"Like it or loathe it, Australia's housing ecosystem relies significantly on foreign cash to support it, and to ensure that the more than $7 million renters across Australia have access to adequate rental homes," he said. "So it's concerning to see less of that cohort that, in recent decades, have been very active and that has contributed to the health of the Australian property sector."
Ray White Group chief economist Nerida Conisbee agreed China's domestic property troubles were a factor, adding that policy settings had also deterred investors.
"We have actively pushed them out. We know they will look globally, and if there is somewhere with more favourable tax treatment, they will look there," she said.
Grit Real Estate founder Navin De Silva, meanwhile, cautioned that Australia faces stiff competition for offshore capital, citing Dubai's zero-tax regime and yields of 8 to 10% as a direct alternative investors were weighing.
"The underlying case for Australian property is strong enough to win that competition, but not if the policy settings keep making it harder to participate," he said.
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