Chinese Property Buyers Invade Australia! By James Reed

The article "Chinese Buyers Raid Australian Property" from Macrobusiness.com.au by Leith van Onselen, published on February 28, 2025, discusses the anticipated surge in property purchases by Chinese investors ahead of new regulatory changes in Australia. Effective April 1, 2025, the Australian government will implement a two-year ban preventing temporary residents from purchasing established dwellings. Previously, temporary residents could apply to buy an established home for personal use during their stay or for redevelopment purposes that increased housing stock. Under the new regulations, only Australian citizens and permanent residents will be permitted to purchase established homes, while non-residents will be restricted to new dwellings or off-the-plan properties.

This impending policy shift has led to a notable increase in interest from Chinese buyers. Fiona Yang from Plus Agency observed a surge in applications to the Foreign Investment Review Board (FIRB) from Chinese investors, noting that many perceive this as their last opportunity to purchase established properties before the ban takes effect. She mentioned that some real estate agents are leveraging the upcoming restrictions as a marketing tactic to expedite sales, urging buyers to act swiftly. Similarly, Robert Ding of Belle Property reported a rise in Chinese buyers attending open houses in Melbourne who require FIRB approval. However, perspectives vary; Sydney real estate agent Jason Roachs believes the ban will have minimal impact, as most of his Chinese clients already hold permanent residency and are thus unaffected by the new restrictions.

The government's decision to implement this ban aims to alleviate pressure on the housing market by reducing competition for established homes, thereby addressing affordability concerns. While foreign investors are not the sole contributors to rising property prices, their participation does have a stimulatory effect. Redirecting foreign investment towards new constructions could potentially enhance housing supply. Despite these intentions, some experts argue that the ban may be ineffective due to significant loopholes. For instance, many "foreign buyers" are migrants who have become Australian citizens and are therefore not subject to the ban. Saxon Davidson from the Institute of Public Affairs highlighted that record migration rates are the main driver behind Australia's housing shortage, not foreign investors.

The broader context reveals that Chinese investors have consistently played a significant role in Australia's real estate sector. In the financial year ending June 2024, Chinese buyers were the largest foreign investors in Australian residential properties, spending approximately $3.4 billion. Australian purchases of communist China real estate? Zero.

This trend has continued into the current financial year, with Chinese buyers leading foreign investments in Australian property. Factors such as a weakening Australian dollar and a sluggish domestic property market in China have made Australian real estate an attractive investment for Chinese nationals.

In conclusion, the forthcoming ban on temporary residents purchasing established dwellings in Australia has prompted a surge in property acquisitions by Chinese investors seeking to finalise transactions before the restrictions commence. While the policy aims to address housing affordability and availability, its effectiveness remains a topic of debate, particularly considering the significant role of foreign investment in the Australian property market and potential loopholes within the ban's framework. It is too little, almost too late.

https://www.macrobusiness.com.au/2025/02/chinese-buyers-raid-australian-property/

"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.