As the Australian housing market continues to grapple with affordability and availability issues, a significant policy shift is on the horizon that could impact the real estate landscape and, more importantly, your home’s value.
The Labor government has announced a bold move to freeze foreign investors out of the existing homes market for two years starting April 1, a policy aimed at freeing up properties for Australian buyers amidst a deepening housing crisis.
Under the new plan, foreign investors, including temporary residents such as international students and foreign-owned companies, will be barred from buying established dwellings in Australia. However, they will still be permitted to purchase new dwellings, which is intended to encourage the construction of new housing stock.
Additionally, a special exemption will be made for workers on a Pacific visa scheme.
The government is also taking a firm stance against land banking by mandating that foreign investors who buy vacant land must develop it within a reasonable timeframe. This measure is designed to prevent investors from holding onto land without contributing to the increase in housing supply.
Housing Minister Clare O’Neil has been vocal about the need for such measures, stating, ‘We’re in the midst of a housing crisis because, for 30 years, governments around the country haven’t built enough homes for the Australians who need it.’
This sentiment echoes the frustrations of many Australians who have found themselves priced out of the market or struggling to find suitable housing.
Interestingly, this policy reportedly isn’t a Labor brainchild. Opposition leader Peter Dutton first floated the idea in his budget reply last year. The move by Labor to adopt a similar stance has drawn criticism from both sides of the political spectrum.
Opposition housing spokesman Michael Sukkar accused Labor of hypocrisy, saying, ‘They absolutely bucketed this policy for the last 12 months and now five minutes before the election they copy it.’
Meanwhile, Greens housing spokesman Max Chandler-Mather dismissed the policy as insufficient, claiming it ‘will not touch the sides of the housing crisis.’
The Coalition, on the other hand, is advancing its solution to the housing dilemma by proposing to allow first-home buyers to access $50,000 from their superannuation to put towards a home.
Dutton emphasised the importance of prioritising Australians, including first-generation citizens, in the housing market. However, this approach has not been without its detractors, with the Greens questioning the wisdom of depleting retirement savings for home purchases.
As the political parties spar over the best way to tackle the housing crisis, the latest YouGov poll suggests a tight race, with the Coalition slightly ahead. Yet, even if the poll results translate into election results, Dutton would face the challenge of negotiating with the crossbench, some of whom are calling for broader changes to parliamentary operations.
Teal independent Allegra Spender highlighted the need for a more collaborative decision-making process in parliament, saying, ‘[It’s] not just about the day of forming [a] government but also about how we make decisions in the parliament.’
So, what does this mean for you? The ban on foreign investors could potentially reduce competition in the market, making it easier for locals to purchase homes.
This might stabilise or even increase the value of your property as demand from Australian buyers remains strong. However, it’s also crucial to consider the long-term implications of such policies on the housing market and the economy.
As you navigate these changes, it’s essential to stay informed and consider how they align with your property goals. Whether you’re looking to downsize, invest, or buy your first home, understanding the shifting landscape can help you make the best decisions for your future.
We invite you to share your thoughts on these policies. Are you in favour of using superannuation to fund first home purchases? Join the conversation below and let us know how these issues affect you and your approach to the housing market.
Also read: Who is taking the lead? New poll reveals the public preference for PM
Should be a permanent ban by firb as it used to be at the turn of the century
It doesn’t go far enough. Should be introduced immediately that all non Australian citizens cannot own freehold property including land.
The government should also introduce that all current foreign owners of land and property be given 2 years to sell their property or it will be seized by the government and auctioned. Proceeds will then be forwarded to the foreign owner minus taxes, fees and government costs. Any capital gains tax will also be at 100%.
You would be surprised how many countries already have in place these property laws to protect their own citizens from foreign exploitation.
Try to purchase either a house or land in any of our northern neighbours countries and the answer will be “no, it must be purchased by a local, no foreign ownership”.
So, Why Not Here ???
Will achieve nothing. What is needed is to remove housing from being an investment, and restore it to being a service. Negative gearing should be removed. Owning more than 2 dwellings should be curtailed by imposing significantly higher levies upon those ‘investment properties’. The younger generations have been locked out of the market by the greed of the older generations, cashed up by better superannuation schemes, by buying their own houses at a fraction of the current cost. The field needs to be levelled again.
According to the Real Estate Institute of Western Australia news release :-
“According to new data from the Commonwealth Bank of Australia (CBA), when it comes to buying investment properties last year, Millennials are the most active generation, followed by Gen Xers.”
“Millennials (born 1981 – 1996) made up 46 per cent of the bank’s property investment loans in 2023, with Gen X (born 1965 – 1980) accounting for 37 per cent of all new investment property loans over the same period.”
So, it is not the Older Generations that are “at fault” as you are trying to imply !!
This was almost the same policy the Liberal party put forward that Labour were aghast at and against.
Copy cats who have no new ideas and put forward the opposition’s like their own.