Foreign investors have again been locked out of purchasing homes in the Australian market as the government works to level the playing field amid critically low housing stock.
In the lead up to the 2026 Federal Budget, treasurer Jim Chalmers said an extension to the ban will open the door for more Australians will be able to buy homes that would have otherwise been bought by foreign investors.
Foreign investors have generally been barred from buying existing property except in limited circumstances, such as when they come to live in Australia for work or study.
Dr Chalmers said decision to extend the existing ban on foreign purchases of established homes by two years and three months, taking the ban to 30 June 2029. As that date rolls around, the government says it will again review the data to see whether the ban should be extended again.
“We know it’s too hard for too many Australians to buy their own home and get ahead and that’s why we’re investing in housing supply, making our tax system fairer and putting first home buyers ahead of foreign investors."
What it includes
The ban had originally been implemented for two years from 1 April 2025 and extends to targeting land banking, where foreign investors buy vacant land and hang onto it in the hope of a future profit without developing. The impact of land banking can be the delay of building projects.
Foreign buyers have historically bought up land. Picture: Getty
The ban also includes more funding for the Australian Taxation Office’s (ATO) foreign investment compliance team to enforce the ban and enhance screening of foreign investment proposals relating to residential property to ensure the ban is complied with.
What it means
The extension of the ban means that people from overseas, including temporary residents and foreign-owned companies, are unable to buy homes in Australia, unless an exception applies. For example, the ban does not include New Zealand citizens.
Exemptions are also possible for partners of Australian citizens or permanent residents on temporary visas that line up directly to permanent visas after several years, though additional tax applies.
To be enforced by the ATO, these exceptions could include investments that significantly increase housing supply or support the availability of housing supply.
Availability of housing is under pressure. Picture: Getty
Historically, more people migrate to Australia than migrate away each year, meaning overseas migration has been a significant source of population gain for Australia.
In the year ending 30 June 2025, overseas migration contributed a net gain of 306,000 people to Australia’s population. This was a decrease from the net gain of 429,000 people the previous year, Australian Bureau of Statistics shows, and below 2022/2023, when 538,000 migrants arrived in Australia.
Migrant facts
As many Australians trying to keep a roof above their head and experts debate how to fix the nation’s critically desperate situation with the housing shortage, migrants have regularly been cast as one of the reasons for the problem.
Some have also pointed to migrants for pushing up rents and making it more difficult for first home buyers to get a foothold on the property ladder.
However, the Settlement Council of Australia says while migration does influence housing demand, attributing the housing affordability crisis solely to migrants oversimplifies the issue.
“Migration is critical to Australia’s economic and social wellbeing, so it is essential that our housing policies can accommodate new migrants," it stated. "Recognising the positive economic contributions of migrants can lead to a more informed and balanced public discourse on housing affordability in Australia."
Behind deadline
An extension to the ban comes as Australia struggles to meet the National Housing Accord target of 1.2 million new homes by June 2029.
The Institute of Public Affairs (IPA) recently pointed out that the government is nearly 80,000 homes behind on its housing commitment. Between December 2025 and January 2026, approvals declined by 7.2 per cent, which was the second consecutive month of declining approval numbers.
The National Housing Accord target is slipping away. Picture: Getty
“The mismatch between supply and demand in the housing market isn’t simply theoretical," senior research fellow Kevin You said. "Young Australians feel it in the long lines at rental inspections, when they get rejected for a home loan, when they get outbid at an auction, and when they get notice of a rent increase."
Foreign investors circling
Despite hard rules, interest in Australian real estate has been rising. The latest data from the Foreign Investment Review Board reveals there were 929 Australian home sales worth a combined $1.2 billion approved to buyers outside of the country in the first three months of 2025.
That brings the total of known sales to offshore buyers in the 2025 financial year to $3.7 billion.
The majority of international buyers are from China. Picture: Getty
Most international buyers are from China, who tend to be cash buyers, followed by Taiwanese buyers, and those from Vietnam, the United States, Indonesia and Hong Kong.
Separate data from realestate.com.au shows that demand is rising from the rest of the world, with a 3.4% increase in search activity for Aussie homes spearheaded by prospective buyers in New Zealand, the United States, Singapore, Hong Kong and Canada.
While some housing sector pundits suggest that the idea only rears its head when affordability deteriorates, others aren’t so sure just how much impact the ban will actually have on the housing market is yet to be seen.
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