From 1 April 2025, temporary residents will be banned from purchasing established dwellings for two years.
Previously, temporary residents have been permitted to apply for approval to buy an established home to live in for the duration of their stay. They have also been allowed to purchase an established home for redevelopment if it increases the housing stock.
The rule change means that buyers who are not Australian citizens or permanent residents will only be permitted to purchase new dwellings or off-the-plan sales from 1 April.
Fiona Yang from Plus Agency anticipates a surge in applications to the Foreign Investment Review Board (FIRM) from Chinese buyers of residential properties in the next month.
“They worry that this is their last chance to buy”, she said in a statement. “It is true the letter of the law doesn’t ban purchasing of new homes, but many buyers only see the headline”.
“Many unscrupulous agents are using the ban as a selling point to urge buyers to move quickly”.
“You will have a significant increase in FIRB transactions, as they want to catch the last train”, she said.
Belle Property director Robert Ding also says more buyers are coming through Melbourne open houses requiring FIRB approval.
OH Property Group co-founder and principal buyer’s agent Henny Stier also believes foreign purchases will increase before the cut-off.
However, Sydney real estate agent Jason Roachs says the ban will have little impact, as most of his Chinese clients have permanent residency.
“My view as a boots-on-the-ground real estate agent for more than a decade is that it won’t make an ounce of difference. They all have PR and are allowed to buy”, he said.
“I couldn’t tell you the last time I sold an existing home to a buyer that required FIRB approval”.
The ban on temporary migrants purchasing established properties is a good policy.
While they are not the major driver of rising house prices, they do have a stimulatory impact. Moreover, the ban could push some temporary migrants into purchasing new properties, stimulating supply.
The main problem with the ban is that it is only temporary, running for only two years.
Recent Resolve Political Monitoring polling showed that 47% of eligible voters want the ban to be permanent.
Why should non-permanent residents be permitted to own established housing in Australia? They are not adding to supply and they compete with locals for stock.
Moreover, given they are supposed to be in Australia temporarily, they should rent. If they transition to permanent residency, they can own an established home.
That said, the primary solution to Australia’s housing crisis is to run a significantly smaller immigration program focused on quality over quantity.
The Centre for Population projects that Australia’s population will grow by 4.1 million people over the coming decade, with Melbourne (one million), Sydney (900,000), Brisbane (500,000) and Perth (500,000) receiving most of this growth.
Such strong population growth will ensure that housing demand continues to exceed supply, worsening the housing crisis.
