Foreign buyers are flooding into Australia’s property market, with East Asian and Indian Subcontinental purchasers dominating and Victoria the most affected state, a first-of-its-kind report has revealed.
The inaugural report by the Australian Taxation Office’s Register of Foreign Ownership, which was established in 2023 to create a single nationwide record of all foreign-held assets, was released last month and includes assets bought up until June 30, 2024.
The report shows that purchases of residential property by foreign investors increased almost 50% between 2021-22 and 2023-24, with the nationwide total rising from 4,226 foreign purchases in 2021-22 to 6,265 foreign purchases in 2023-34.
Of this more recent figure, investors from Asia were dominant, making up eight of the top 10 source countries for foreign buyers. The USA and the UK were the only top 10 countries found outside the Asian region.
The top four sources of China, Japan, Singapore and Hong Kong are all in East Asia, and those four nations accounted for almost half of all foreign purchases of residential property, according to the report.
Two South Asian states were also in the top ten last year, with India in fifth place with 511 purchases worth $288 million, and Nepal in seventh place with 326 purchases worth $154 million.
China remained by far the biggest buyer of Australian property, with Chinese buyers acquiring over 2,000 residential properties in 2023-24 at a value of approximately $2 billion. Second-placed Japan had around half that amount with 1,071 properties valued at $547 million.
The report also included longer-term trends in foreign ownership of Australian property, revealing that foreign buyers bought over 40,000 Aussie properties between 2016 and 2024, with Victoria accounting for almost half the national total with around 17,000 overseas acquisitions.
Victoria remained the most popular state for foreign buyers, with the most recent Victorian figure of 2,606 purchases accounting for more than a third of the Australian total. The Victorian number is now more than double that of second-placed Queensland and third-placed New South Wales, with 1,099 and 985 acquisitions respectively.
The explosion in foreign interest in Victoria was further confirmed by last year’s figure of 2,606 representing a more than 50% jump on the 1,703 purchases seen two years prior.
The rise also occurred despite the introduction of a raft of fees and other initiatives aimed at dampening offshore demand.
Sha Liu, senior housing policy researcher at the University of Adelaide, told The Age measures by both state and federal governments – such as land-tax surcharges, an annual vacancy fee, and a capital-gains tax for non-residents – have made it more expensive for foreign buyers to acquire Aussie property.
Despite these initiatives and issues such as Australia’s current crime crisis, the country remains a popular destination for foreign buyers, and Ms Liu said overseas investors were still interested in Australia, and “prime locations in Sydney and Melbourne” in particular.
“As for where the investment is happening, it’s still concentrated in New South Wales and Victoria, mainly Sydney and Melbourne,” Ms Liu said.
This is primarily due to the “global” status of Australia’s two largest cities and the desires of foreign finance.
“Global cities tend to attract international students and knowledge workers; they are generally more appealing to global capital,” Ms Liu said.
The report further noted that Australian agricultural land remains attractive to overseas investors. Registered interest in the nation’s farmland rose 3% between 2022 and 2024 to sit at 12.7% of the overall total.
Britain, China, Canada, the United States and the Netherlands were the largest foreign holders of the country’s farmland, with these five countries accounting for almost half of all Australian agricultural land under foreign ownership.
The states and territories with the largest share of farmland under foreigner ownership were the Northern Territory with 27.6%, Tasmania with 23.9% and Western Australia with 13.3%
Header image: A packed auction in Sunnybank Hills, Queensland, in August that was eventually won by an Afghan family (Place Sunnybank).
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