The Federal Government’s latest announcement of a temporary two-year ban on foreigners purchasing existing housing in Australia has led to some confusion  about its impact. It is essential to clarify that under the updated FIRB regulations, foreign buyers can still purchase off-the-plan properties and newly completed dwellings without being affected by the  revised rules. 

The new regulation, effective from 1 April 2025, will prevent temporary residents from purchasing  established houses. This change is intended to support the creation of new housing by redirecting  demand towards new apartments and houses, which will see further demand channelled towards key off-the-plan markets. 

Managing Director, Victoria | Residential, Tim Storey, said, “We expect that the effects of this policy change will surprise on the upside, especially for developers of new apartments in Melbourne who  will now have a larger pool of buyers.” He added, “This policy is a positive step towards addressing the housing supply issue in Australia. By encouraging the purchase of new dwellings, we are also  supporting the construction industry.” 

According to the latest available statistics, foreign buyers have purchased an annual average of only 1,291 established homes over the past three years, representing just 0.24% of overall housing  market sales.  

Significantly, Victoria has consistently attracted the highest levels of foreign buyer activity across all categories, accounting for 45% of purchases across Australia over the past three years. This trend is  expected to continue, benefiting developers in the state. 

Mr Storey added, “The updated FIRB regulations combined with the Reserve Bank of Australia’s  recent announcement of a cash rate cut, which lenders have passed through, create a more  favourable environment for new housing developments. Developers should see this as an  opportunity to meet the growing demand for new dwellings.”

“This change ensures that the market for off-the-plan properties remains robust and continues attracting foreign investment,” said Mr Storey.