Many international investors see opportunity in the Australian property market, both commercial and residential, but how difficult is it for them to buy?
According to a NAB survey in 2022, nearly 5% of the Australian property market is owned by overseas investors. Foreign ownership is a bit of a controversial topic, with several political figures suggesting Australia should follow the example of New Zealand and Canada and place further restrictions on foreigners owning residential property to stop prices from being driven up.
For the moment, foreign investors are able to purchase Australian property, but there is still a bit of a process they need to go through before they are approved. Per Treasury’s Foreign Investment website, Australia welcomes foreign investment provided it is in the national interest.
Can foreigners buy property in Australia?
Foreigners are allowed to buy Australian property provided they receive approval from the Foreign Investment Review Board (FIRB). Anyone that isn’t an Australian citizen or permanent resident needs to make an application with the FIRB to get permission to buy. These are reviewed on a case by case basis to ensure they are not contrary to the national interest, and ensure the investment is likely to bring some benefit to Australia. For example, foreigners can generally buy newly constructed dwellings with few restrictions, since this contributes Australia’s housing supply.
With that principle in mind, the Government tends to take the following approaches to specific investment proposals:
- New dwellings: These are usually approved with minimal conditions.
- Vacant land: Investors tend be approved to buy vacant land provided construction of a dwelling is planned to be completed within four years.
- Established dwellings: Foreign investors can apply to purchase an existing dwelling for redevelopment, if the proposed redevelopment genuinely increases Australia’s housing stock. For example, knocking down a single dwelling and replacing it with two townhouses would likely be approved.
- Buying a home to live: Temporary Australian residents are able to apply to purchase one established dwelling to live in while they are in Australia. However, the home must be sold once they leave unless they become a citizen or permanent resident.
