Canberra:

Australia is planning to ban foreigners from buying established houses for the next two years. The move is part of Prime Minister Anthony Albanese-led government’s election pitch to tackle surging home prices. The move is likely to affect a large number of Indians who go to Australia for their higher education and later settle there. 

Australia’s Housing Minister Clare O’Neil announced that from April 1, foreign investors will be banned from buying established property until March 31, 2027.

After the deadline, the restriction will be reviewed to determine whether it should be extended, she noted, adding that the tax office will be given extra funding to help enforce the ban.

Housing Crisis In Australia

Australia’s housing is some of the most unaffordable in the world. With elections in Australia set to be held later this year, soaring property prices are likely to be the key issue amid a broader cost-of-living crisis, especially among young voters who fear they’ll never be able to buy a home. Rents have also been climbing in the country in recent years.

In Sydney, housing values have jumped almost 70 per cent over the past 10 years, with the median dwelling price now around A$1.2 million ($762,000), Bloomberg reported quoting property consultancy CoreLogic Inc.

Per figures issued by the Australian Taxation Office, overseas investors bought A$4.9 billion of residential real estate – including vacant land, and new and established dwellings – in the 12 months ended June 30, 2023.

Who Will Be Affected

Under the new rule, foreign investors, including temporary residents such as international students and overseas companies, will be restricted from buying established residential properties during the two-year period. 

However, they will still be able to purchase new dwellings to encourage housing supply and a carve-out will also be provided for workers on a Pacific visa scheme.

Additionally, the government is also planning to curb land banking by foreign investors, requiring them to develop vacant land within a set timeframe. 

Australia has been a preferred choice for Indian students aiming to pursue top-notch education and bright career prospects overseas. In 2023-24, India remained the leading source country for immigrants to Australia.

Labor Replicates Coalition Policy

The Labor government’s move to ban foreign purchases of established houses matches a pledge by opposition leader Peter Dutton made last year. An election must be held by May 17, and polls show it will be a close fight, with cost-of-living concerns and housing among the top three issues.