Conveyancers unimpressed by foreign investors plan
The government’s move to ban foreign investors for two years has been labelled a distraction and will make little difference to the housing crisis, given that there were just 5360 residential real estate purchases in 2022/23.
PRACTITIONERS say the government’s move to ban foreign investors for two years is a distraction and will make little difference to the housing crisis.
The ban, which is also a Coalition policy, has also received a mixed response from housing industry bodies.
Under the government’s plan, foreign investors – including temporary residents such as international students – will be unable to purchase an established dwelling in Australia from April 1 until March 31, 2027.
They will still be able purchase new dwellings to encourage housing supply and a carve-out will also be provided for workers on a Pacific visa scheme.
The government will also crack down on land-banking by forcing foreign investors who purchase vacant land to develop it within a reasonable time frame.
In 2022/23, foreign investors accounted for 5360 residential real estate purchases, of which only one-third were existing dwellings. That’s out of a total 670,000 property purchases per year.
Dott & Crossitt founder Jared Zak said: “I think the Government’s two-year ban on foreign purchasers is mostly just political theatre to distract voters from the supply side problem.
“That market dried up years ago when the State Governments imposed an eye watering surcharge (presently 9% of the purchase price in NSW) on foreign buyers.
“By way of example, in the 5,000+ transactions Dott & Crossitt Conveyancers + Solicitors did in 2024, the amount where our clients paid surcharge duty would have been no more than a dozen.
“That said, those dozen or so surcharge fees would have been significant income for the State Government – I wonder how the States will feel about this revenue source taken away for two years?.”
Conveyed owner Melissa Barlas was Also of the same opinion about the new rules that come into effect on April 1.
“Data from the last year suggests foreign investment accounted for less than 1% of property purchasers,” said Melissa.
“It’s questionable how this ban would affect housing affordability or supply, give the low % of foreign investors.”
The HIA’s Tim Reardon said: “Foreign investors have been prohibited from buying estbalished homes since the 1970’s.
“Forcing international students to rent, not buy, doesn’t decrease the the demand for homes, or increase the supply.
“If we keep blaming foreigners, investors and foreign investors for our housing shortage, the problem will persist.”
