In a striking revelation, 67 percent of the more than 40,000 Australian residential properties registered as foreign-owned are linked to buyers from China. This comes amid evolving strategies by international investors to mitigate government-imposed surcharges.
The Australian Taxation Office’s (ATO) Register of Foreign Ownership of Australian Assets tracks properties acquired from 2016 to 2024, predominantly under the Foreign Investment Review Board’s oversight, that remain under foreign ownership. The data, quietly released last year, highlights a significant trend in foreign real estate investment in Australia.
Victoria Leads in Foreign-Owned Properties
Victoria emerges as the leading state with 16,929 foreign-owned properties, accounting for over 40 percent of such investments. New South Wales follows with 8,862 properties, while Queensland and South Australia have 8,129 and 2,129 respectively. The majority of these properties are new builds, totaling 23,147, although 8,463 established homes also feature on the register.
The purchase of established homes is currently restricted to a select group of international buyers, including permanent residents, New Zealand citizens, and temporary residents residing in Australia. Historically, Chinese investors have been the dominant force among the 135 countries involved in purchasing Australian land.
Shifting Investment Strategies
According to PropTrack senior economist Eleanor Creagh, Chinese government controls on capital movement will significantly influence international investment in the coming year. The strong presence of Chinese investors reflects their connection to Australian educational institutions and businesses.
“There’s also skilled migration programs that are probably creating a link between investment and housing demand for the APAC region members,” Ms. Creagh noted.
Despite federal government bans imposed last year, ongoing international demand for Australian homes is expected to persist into 2026, driven by a weak Australian dollar and an anticipated increase in new home builds.
Market Dynamics
Peter Li, General Manager of Plus Agency, remarked on the misconception regarding the volume of foreign buyers. “Most people believe there are more foreign buyers than there actually are,” he stated. Foreign buyers represent only a small fraction of home purchases, and many are opting to sell due to rising holding costs.
“Many foreign buyers who bought over the last 10 or 20 years now find it is too expensive to hold onto their Australian property because the government has increased the keeping costs,” Mr. Li explained.
Investors are increasingly favoring house and land packages over apartments to minimize tax liabilities. By splitting contracts, they avoid surcharges on construction costs, reducing upfront expenses.
Policy Impacts and Future Trends
Despite stringent foreign investment controls, such as higher taxes and restrictions on property types, the demand for Australian real estate remains robust. New South Wales and Victoria, with their punitive tax regimes, continue to attract significant foreign investment.
Real Estate Institute of Victoria chief executive Toby Balazs attributes Melbourne’s popularity to its affordability and migration appeal, though he expressed surprise at New South Wales’ lower figures.
“There’s the universities and jobs, and you do see that through migration with Melbourne being a strong migration destination,” Mr. Balazs said. “But the fact that it is almost double NSW is somewhat surprising.”
Juwai IQI founder Daniel Ho anticipates that migration numbers will play a crucial role in future international ownership data. Victoria is expected to remain the top destination for Chinese buyers, with inquiry levels rising in recent years.
“We expect home prices to continue to climb to 2030 because of the housing shortage,” Mr. Ho said. “So, for anyone moving to Australia for the long-term, it makes sense to buy rather than rent.”
The ongoing trends in foreign ownership of Australian real estate underscore the complex interplay of global economic forces, government policies, and market dynamics, shaping the future of the housing market.
