with the Government announcing a ban on foreigners buying established homes for two years, matching the opposition’s policy from last year.
It’s popular with the voting public, but how much difference will this make to house prices?
Per the ABS, ~530,000 residential properties transacted in the full year to September 2024. Roughly 5,360 foreign purchases occurred in FY23 – so approxiimately 1% of total sales.
Of those 5,360, only ~1/3 were established homes (+/-1,800) with the balance being new dwellings.
So this change will make 3/5ths of bugger all difference to overall house prices (who knew that mathematically 3/5 Bugger All = 0.33%).
And the likelihood is most were well-heeled visitors, purchasing more expensive homes in upmarket suburbs, not entry level homes.
So, whilst this may help on the margins if you were hoping to buy a home in Kew, Toorak or Potts Point, it won’t move the dial on overall affordability.
📈It may lead to an uptick in new #housingsupply if those 1,800 buyers choose to purchase a new dwelling instead. As long as they can wait for things to be built, that is, or it will negatively impact the rental market instead.
I suspect broader community perception around foreign buyers impacting house prices is from seeing non-white looking people buying a home down their street, even though they are overwhelmingly Australian permanent residents or citizens.
In a multi-cultural, migrant society like Australia, it’s hardly surprising that the people buying homes would come from varied backgrounds.
Foreign investors have also been discouraged to invest in Australia by the states due to a litany of extra duty imposts, which has had a major negative impact on new supply, particularly rentals.
🤔 I guess you could call this an overall net, albeit minor, positive for new #housingsupply. But there are many far more impactful things that could (and should) be done.
Stay tuned for thre fun months of housing-related announcements!