A staggering 67 percent of the over 40,000 Australian residential properties registered as foreign-owned are linked to buyers from China, according to newly released data. This revelation comes as experts highlight how international investors are adapting their strategies to navigate government surcharges.
The Australian Taxation Office’s (ATO) Register of Foreign Ownership of Australian Assets tracks homes purchased from 2016 to 2024, primarily under the oversight of the Foreign Investment Review Board. The data indicates that Chinese investors are the predominant foreign buyers, accounting for more than 23,500 properties, a number that rises to over 27,000 when including purchases from Hong Kong.
Geographical Distribution and Property Types
Victoria emerges as the most popular location for foreign-owned properties, with 16,929 addresses, representing over 40 percent of the total. New South Wales follows with 8,862 properties, while Queensland and South Australia host 8,129 and 2,129 foreign-owned homes, respectively.
The data, released quietly late last year, reveals that the majority of these properties are new builds, totaling 23,147. However, 8,463 established homes remain on the register, having been purchased by international buyers between July 1, 2016, and June 30, 2024. The purchase of established homes is now largely restricted to a select group of international buyers, including permanent residents, New Zealand citizens, and temporary residents.
Impact of Chinese Investment
Historically, Chinese investors have been a dominant force among the 135 countries involved in purchasing Australian land. PropTrack senior economist Eleanor Creagh suggests that Chinese government controls over capital outflows will significantly influence international investment trends in the coming year.
“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 implemented last year, the demand for Australian homes is expected to continue through 2026, driven by favorable conditions such as the weak Australian dollar and the perception of Australia as a safe haven.
Shifting Investment Strategies
Peter Li, General Manager of Plus Agency, a residential project marketing firm, noted that many foreign buyers are reconsidering their investments due to rising costs. He explained that while apartments were once a popular choice, investors are now gravitating towards house and land packages to minimize tax liabilities.
“For a house that costs $1 million in the Sydney metro area, the land might work out to be worth about $350,000, while the construction might cost $650,000. They only pay FIRB fees and a stamp duty surcharge on the $350k portion,” Mr. Li explained.
This strategic shift allows investors to avoid substantial surcharges associated with apartment purchases, which can significantly increase upfront costs.
Market Dynamics and Future Projections
Despite stringent controls on foreign investment, such as higher taxes and restrictions on property types, the demand for Australian real estate remains robust. New South Wales and Victoria, despite having the most punitive foreign investor tax regimes, continue to be the top investment destinations.
Real Estate Institute of Victoria CEO Toby Balazs attributes Melbourne’s appeal to its strong migration levels and relative affordability. Meanwhile, Juwai IQI founder Daniel Ho anticipates that migration numbers will play a crucial role in shaping future international ownership trends.
“We expect home prices to continue to climb to 2030 because of the housing shortage. So, for anyone moving to Australia for the long-term, it makes sense to buy rather than rent,” Mr. Ho stated.
As Victoria remains a favored destination for Chinese buyers, with increasing inquiry levels, the state’s prominence in the international market is expected to persist.
In conclusion, while foreign ownership of Australian properties is subject to evolving regulations and market dynamics, the underlying demand driven by strategic investments and migration trends suggests a continued international interest in the Australian real estate market.
