Anthony Albanese has launched a crackdown on foreigners buying property in Australia after record-high immigration caused a housing shortage.
Foreigners are only allowed to buy an established property in Australia if they are residents and can prove they are living, working or studying locally.
But the Prime Minister – now more politically focused on the cost of living crisis – wants to make it harder for foreigners to buy an established home and instead encourage them to buy something brand new.
Labor on Wednesday introduced legislation designed to boost the supply of new housing, after a record 518,000 migrants moved to Australia during the last financial year.
Australia’s rental vacancy rate plunged to a record-low of one per cent in November, as an influx of international students competed with locals for somewhere to live.
House prices in Sydney, Brisbane and Perth last year also surged by double-digit figures despite the Reserve Bank raising interest rates for the 13th time in 18 months to a 12-year high of 4.35 per cent.
Anthony Albanese has launched a crackdown on foreigners buying property in Australia after record-high immigration caused a housing shortage (pictured are prospective buyers of a unit at Chatswood on Sydney’s lower north shore)
The Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2024 will triple the fee for foreigners buying established homes and double the vacancy fees for foreign-owned dwellings bought since May 9, 2017.
Treasurer Jim Chalmers and Housing Minister Julie Collins said the changes were designed to ensure foreign investment aligned with the government’s plan to boost affordable housing.
‘These changes further encourage foreign nationals to buy new property instead and help to ensure that those who do get approval follow the rules,’ they said.
Dr Chalmers and Ms Collins argued the legislation would encourage foreigners buying property in Australia to put their money into new homes, and boost the housing stock.
‘The higher fees for established dwellings will encourage foreign buyers to invest in new housing developments,’ they said.
‘This will help create additional housing stock, jobs in the construction industry and support economic growth.
‘The increased vacancy fees will encourage foreign investors to make their unused properties available to renters.’
Foreigners wanting to pay lower fees will have options with build-to-rent projects.
International students can buy property in Australia to live in but they must sell within six months of graduating and leaving Australia, if they have not become a permanent resident.
The Prime Minister – now more politically focused on the cost of living crisis – wants to make it harder for foreigners to buy an established home and instead encourage them to buy something brand new (he is pictured at a United Nations International Women’s Day Parliamentary Breakfast in Canberra)
Labor’s legislation didn’t specify increased penalties for international students who failed to sell within six months – something One Nation leader Pauline Hanson had pushed for.
‘One major problem in the system we have – which permits property purchases by temporary visa holders and foreign buyers – is that there are virtually no resources put towards policing it,’ Senator Hanson told Daily Mail Australia in October.
‘Temporary visa holders and international students are supposed to sell their property when they leave Australia, but this isn’t being enforced and it’s making our housing crisis worse by keeping residential property off the market.’
Temporary residents, foreigners living in Australia and short-term visa holders are allowed to buy an investment property or a home to live in – provided they obtained approval from the Foreign Investment Review Board.
An Australian Taxation Office spokesman told Daily Mail Australia it had forced foreign investors to sell 672 Australian properties, collectively worth $670million, between 2015 and 2023.
Foreign residents who aren’t studying, working or living in Australia are restricted to buying something brand new.
Labor and the states in August announced a goal of building 1.2million homes over five years from July 1, 2024, but this aspiration will be difficult to achieve, following a series of home building company collapses.
International students can buy property in Australia to live in but they must sell within six months of graduating and leaving Australia, if they have not become a permanent resident (pictured are students at the University of New South Wales)
The most aggressive interest rates rises since 1989 and higher building material costs have challenged the viability of residential construction firms that rely on fixed-price contracts.
A housing shortage and a 2.4 per cent population growth pace in 2022-23 led to Sydney’s median house price surging by 12.8 per cent in the year to January to an even more unaffordable $1.395million, CoreLogic data showed.
Brisbane, which receives more population growth from interstate migration, saw its mid-point house price climb by 15 per cent to $888,628 as Perth prices rose by 17 per cent to $708,335.
The typical house in even the more affordable state capital cities is unattainable for an average, full-time worker on a $95,581 salary, even with a 20 per cent mortgage deposit.
Higher mortgage costs mean those with a job are continuing to suffer more from the cost of living crisis, with new Australian Bureau of Statistics data showing employee living costs soaring by 6.9 per cent in 2023, compared with 4 per cent for self-funded retirees.