Foreign investors spent $5.3 billion on Australian residential real estate in just the first nine months of last year, purchasing more than 4,700 homes.
Data from the Federal Treasury shows that Chinese investors led the way, buying 1,955 homes valued at approximately $2.5 billion. Meanwhile, Hong Kong buyers acquired over 400 homes worth $300 million, and Vietnamese and Taiwanese investors purchased 259 and 272 properties, respectively. In NSW alone, foreign investors bought 664 homes during the 2021-22 financial year, totalling $1.012 billion in investment.
Amid this influx, NSW Premier Chris Minns has proposed increasing state taxes for foreign investors in the upcoming budget, aiming to raise the foreign tax surcharge and close loopholes that allow temporary residents to buy and leave properties vacant. Since 2016, additional charges, including an 8% surcharge on stamp duty and a separate land tax, have raised $2.65 billion from 14,550 transactions. The surcharge alone has generated an extra $1.12 billion, predominantly from Chinese nationals who contributed almost $635 million, with significant contributions also from Hong Kong and Vietnamese buyers.
Recent federal legislation by the Albanese government has further increased fees for foreign investors and addressed a loophole that resulted in $57 million in refunds due to inconsistencies between state and federal laws.
Despite concerns, the investment in high-value properties by international buyers is seen as having little direct impact on the overall shortage of affordable housing or on lower-end property values in Sydney.
Disclaimer: This article contains opinions and information regarding foreign investment trends in Australia’s residential real estate market. While every effort has been made to ensure the accuracy of the data, the figures and outcomes discussed should be verified with independent sources for confirmation.
