Australia | 11:00 AM
Did you know 40% of foreign-owned residential homes are based in Victoria? There are probably a few more statistics and data about Australian properties and foreign investors that might surprise you.
By Erick Nyamagwa
Foreign investors are corporations, governments, individuals, trustees of trusts, businesses or partnerships who invest in businesses or land in Australia.
Over the past few decades, Australia has been a magnet for foreign investors seeking lucrative investment opportunities. This is because of Australia’s strategic positioning, abundant resources, and a stable legal and economic environment.
According to Australia’s Department of Foreign Affairs and Trade, foreign economies held $5trn in assets in the country by the end of 2024. The leading investors in the local property market are the U.S and the U.K, closely followed by China, Japan, and Belgium.
This article shines a light on the impact of foreign investment in Australia’s property market. It will also reveal whether foreign investment is sufficient to justify public concerns among policymakers, investors, and homeowners.
Let’s get into it.
The Scale of Foreign Investment in Australian Real Estate
According to YIMBY Melbourne, foreign owners hold only 2% of Australia’s housing stock.
However, these foreigners continue to deepen their footprint in the Australian property market, particularly in densely populated regions such as Melbourne and Sydney.
In FY23, foreign investors purchased 5,360 residential properties in Australia, up from 4,228 in FY22. The value of these transactions was $4.9bn and $3.9bn, respectively, indicating a gradual increase in foreign purchases of residential homes in Australia.
In terms of geography, foreign investors and buyers prefer capital cities such as Melbourne, Greater Brisbane, and the Gold Coast.
Statistics from the FIRB reveal 78.6% of foreign purchase transactions were recorded in Queensland, New South Wales, and Victoria in FY22.
Latest statistics also reveal 40% (16, 929) of foreign-owned residential homes are based in Victoria. Other destinations that are dominated by foreign buyers are NSW (8862), Queensland (8129), and South Australia (2129).
According to the latest quarterly report (1 April to 30 June 2025) from the Treasury, China is the leading country in residential investment, with the highest number of approved investment proposals.
Of the 907 approved proposals worth $1.3bn, China accounted for $0.3bn, Taiwan $0.2bn, Vietnam $0.1bn, and India $0.1bn.
In the commercial real estate sector, the U.S. remains the dominant foreign investor with the largest number of approved proposals.
Data from the treasurer’s report indicate in 2025, a total of 326 foreign commercial proposals were approved, with a total value of 49.3bn.
Of these, those for the U.S. were worth $11.1bn; Japan followed with $9.2bn, South Korea with $4.1bn, South Africa with $4.1bn, and New Zealand with $3.6bn.
The Impact of Foreign Investment on Australia’s Property Market
Foreign investment has brought both positive and negative effects on Australia’s property market. Let’s first explore the positive side of these investments.
Positive Impacts
According to data from Australia’s Department of Foreign Affairs and Trade, capital inflows from foreign investors have enabled Australia to rank 12th among the world’s largest economies.
This is because Australia uses capital from foreign investments to:
- Finance new industries
- Boost existing industries
- Build infrastructure
- Create employment opportunities
Secondly, foreign investors expose domestic investors to best practices and international standards.
This fosters healthy competition in property markets by encouraging innovation and driving productivity growth. It also attracts new business models with global reach, thereby boosting overall economic performance.
Lastly, foreign investment has stimulated demand for Australian real estate. Foreign investors diversify the market by attracting buyers from various countries worldwide.
This has prompted developers to adapt to changing demands by focusing on modern designs with sustainable features that meet international standards.
Negative Impacts
According to a 2023 study by the University of Technology Sydney, 73% of Australians believe foreign investors have driven up housing prices in Australia.
Foreign buyers, particularly those purchasing property for speculative purposes, have driven up property prices, making it difficult for domestic buyers to afford homes.
Additionally, rental prices have steadily increased in the post-pandemic era, contributing to high inflation rates in Australia.
According to Forbes, immigration and the return of international students are among the leading factors behind the surging rental prices.
They have increased the demand for housing, yet supply is not sufficient to meet demand, especially in urban destinations like Sydney and Melbourne.
Impact of Foreign Investment in Australia’s Land Markets
Apart from investments in housing markets, foreign investors have diversified into land markets. Recent foreign acquisitions indicate foreign investors are scaling their investments by tapping into the agricultural sector.
Findings from the Agri Investor show that by 2023, 47.561m ha of Australian land was foreign-owned, while in 2023, it rose to 49.21m ha. This shows a 3.3% increase in ownership, as shown in the figure below.
The leading investors in Australia’s agricultural land are from the U.K, followed closely by those from China. The U.K. holds 1.9% of foreign-owned agricultural land, while China holds 1.7%.
Still, high-profile land acquisitions by foreign investors continue to attract attention in the country.
For instance, reports from The Good Builder show the Consolidate Pastoral Company (CPC) recently added 712,638 hectares of Australian land to its portfolio for the rearing of goats and sheep.
The company, owned by Guy Hands, a prominent UK investor, currently holds approximately 6.21m hectares of Australian land for agricultural purposes.
The CPC is just a reflection of foreign investment penetration in Australia’s land market. These investors are developing an interest in Australian land because of:
- The rising demand for food and fibre
- Economic stability
- The ability to scale
Geographically, foreign landowners predominate in areas such as Queensland, the Northern Territory, and parts of Western Australia, although the extent of ownership varies across the country.
Despite these large-scale land acquisitions by foreign investors, such transactions are strictly regulated by Australia’s Foreign Investment Review Board (FIRB).
The Impact of Foreign Investment on Australia’s Foreign Investment Policies
Foreign investment in Australia is part of the government’s economic policy. To ensure the nation’s best interests are at heart, the government released a foreign investment policy update on March 14, 2025.
Under this framework, various restrictions, especially in the housing market, have been adopted to protect Australia’s domestic interests.
First, foreign investors are now required to seek approval from the Foreign Investment Review Board (FIRB) on behalf of the government.
These investors are also required to notify the government’s treasurer, who ensures their investments align with the nation’s interests.
In addition, foreign investors must pay a fee, along with their investment proposals, to the treasurer for administrative purposes. The fee ensures that foreigners, rather than Australian taxpayers, bear the cost of administering this framework.
There are also restrictions on the type of property that foreign investors can purchase in Australia. Currently, they are temporarily banned from purchasing established residential properties.
The ban took effect from April 1, 2025, to March 31, 2027. This policy was established to eliminate foreign competition in the housing market and ensure only Australian residents are beneficiaries.
Only foreign investors (especially property developers) who support and increase the housing stock are currently permitted to invest in the country.
Perception vs Reality: How Big is Foreign Investment in Australia?
Currently, Australia is experiencing a housing crisis, and according to a 2023 poll, 73 % of Australians believe foreigners are responsible for it.
While these perceptions may be taken as true, the facts suggest a more nuanced view.
First, foreign owners account for no more than 4% of Australia’s total housing, according to findings from ABC News.
Second, foreign investors are concentrated in a few known destinations, such as NSW, Queensland, Victoria, Melbourne, and Sydney. This is because they value high yields of rental properties; hence, they must invest in metropolitan areas.
Finally, although foreigners have affected the housing market, data suggest they are not the primary drivers of the housing crisis in Australia.
The Justice and Peace Office found rising interest rates, inflation, supply and demand, and consumer desire are the main factors that influence property inflation in Australia.
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