Australia to Ban Foreigners from Buying Existing Homes: Impact on Indian Migrants

Canberra: In a major policy shift aimed at curbing rising housing prices, Australia has announced a two-year ban on foreign investors purchasing existing residential properties. The move, set to take effect from April 1, 2025, is part of the Anthony Albanese-led government’s strategy to tackle the nation’s growing housing crisis.

The decision is expected to have a significant impact on Indian migrants, particularly international students and skilled professionals who plan to settle in Australia.

Ban on Foreign Buyers: What Does It Mean?

Australia’s Housing Minister Clare O’Neil confirmed that the ban would remain in effect until March 31, 2027, after which it will be reviewed. The Australian Taxation Office (ATO) will receive additional resources to ensure strict enforcement of the new regulation.

Foreign investors, including temporary visa holders, international students, and overseas businesses, will be barred from purchasing established homes. However, they will still be allowed to buy new dwellings to encourage housing development.

A special exemption has also been made for workers under the Pacific visa scheme, who will still be able to buy homes.

Australia’s Housing Crisis: A Key Election Issue

Australia's real estate market is one of the most expensive in the world, with housing affordability emerging as a key concern ahead of national elections later this year. The government hopes that by limiting foreign purchases, more properties will be available for local buyers struggling with homeownership.

Housing values have soared, particularly in Sydney, where prices have increased by almost 70% in the past decade. As of 2024, the median house price in Sydney stands at approximately A$1.2 million ($762,000), according to CoreLogic Inc.

Foreign investments in Australian real estate remain substantial. As per figures from the Australian Taxation Office, overseas buyers purchased A$4.9 billion worth of residential property—including vacant land, new, and established dwellings—in the 12 months ending June 30, 2023.

Impact on Indian Migrants

1. International Students and Skilled Workers

• Indian students and professionals looking to settle in Australia may face challenges in purchasing pre-owned homes for the next two years.

• Many Indian families opt for second-hand properties due to lower costs compared to newly built homes. The new policy limits their housing choices.

2. Investment and Real Estate Buyers

• Indian investors seeking real estate opportunities in Australia will have to shift focus to new housing projects rather than established homes.

• Developers may now target Indian buyers with off-plan and newly built housing projects to bypass restrictions.

3. Rental Market and Cost of Living

• With fewer homes available for purchase, rental demand is expected to rise, possibly making housing more expensive for migrants.

• Indians migrating for jobs or studies may face increased rental costs, adding to existing cost-of-living pressures.

Government’s Plan to Combat Land Banking

The government is also moving to curb land banking by foreign investors. Under new rules, foreign buyers who purchase vacant land will be required to develop it within a specified timeframe, preventing land hoarding that contributes to housing shortages.

Political Implications: A Key Election Strategy

With elections set to take place by May 17, housing affordability has become a top political issue. The ruling Labor Party has aligned its policy with a similar proposal from opposition leader Peter Dutton, signaling bipartisan agreement on restricting foreign ownership of established homes.

As the government implements this measure, the long-term effects on housing availability, foreign investment, and the migrant community will be closely watched.