Thousands of Chinese investors are ditching their Aussie investments as experts warn a property market crash in their homeland is flowing through to the lucky country.
But there’s another Asian nation stepping up, with a 46 per cent surge in the number of Australian homes owned by Japan-based landlords in recent data.
Property investors based in the People’s Republic of China have been the dominate foreign force investing into Australian residential property for more than a decade, and owned 22,272 properties around the nation as of June 30, 2025.
RELATED: Offshore landlords claim billions in Australian property tax write-offs
$31bn plunge in Chinese investors will hurt Aus housing, experts warn
Chinese investors are selling off thousands of Aussie homes according to new data Tax Office and Foreign Investment Review Board data.
Andrews-era home move turns Vic landlord exodus global
That accounts for more than 55 per cent of the total foreign-owned homes around the country, according to the Australian Taxation Office’s latest release of the Register of Foreign Ownership of Australian Assets.
But they’re selling up.
In the 2024 financial year Chinese investors owned 23,550 residences nationwide, reflecting a 1278 (5.4 per cent) drop.
Hong Kong-based buyers are also in decline, with their numbers falling from 3486 to 3396 as the world’s second most prolific owner of Aussie homes (outside of Australian citizens and residents).
With separate Foreign Investment Review Board data showing more than 1600 requests to buy Aussie properties were approved to residents of China and Hong Kong in the same financial year, the net reduction suggests closer to 2800 homes were sold off.
2024 financial year foreign ownership data shows the nations whose investors owned the most Aussie homes, and how many they held.
It comes despite a national increase in offshore owned properties over the same timeline, with 40,460 Aussie homes foreign owned by the end of the 2025 financial year compared to 40,177 a year prior.
The biggest rise was recorded from investors based in Japan, with their numbers rising from 1168 to 1711.
The Asian nation is now the fifth-most prolific owner of Australian homes, surpassing the United Kingdom and United States of America, and now not far behind Singapore, which also had an increase in investor numbers by just under 100 to 1978, and Malaysia whose numbers fell away slightly to 1795.
Around the nation, the data shows Victoria has the most foreign owned properties at 16,403, followed by NSW at 9198 and Queensland where internationals own 8465 residences.
The latest 2025 financial year foreign ownership details show which nations have been selling up, and which ones have been buying.
Real Estate Institute of Australia chief executive Jacob Caine said he suspected the sales by Chinese investors could reflect the Asian nation’s own property market woes stemming from a significant oversupply of new housing.
However, he said the sell off was a concern for Australia as it likely represented a significant loss of rental homes.
“Like it or loathe it, Australia’s housing ecosystem relies significantly on foreign cash to support it, and to ensure that the more than $7m renters across Australia have access to adequate rental homes,” Mr Caine said.
“So it’s concerning to see less of that cohort that, in recent decades, have been very active and that has contributed to the health of the Australian property sector.”
While he said it did raise the possibility their homes had been sold to first-home buyers, it was also possible they had not been suitable for them — or were too expensive.
Ray White Group chief economist Nerida Conisbee agreed that China’s appetite for investment properties would also be linked to its own property market problems.
Ray White chief economist Nerida Conisbee believes a Chinese investor sell off is a response to market conditions in China — and Australia having “actively pushed them out”.
“It’s got a little bit more challenged economy, and property in particular isn’t as good of an investment given what’s happened in China,” Ms Conisbee said.
“And we have actively pushed them out. We know they will look globally, and if there is somewhere with more favourable tax treatment, they will look there.”
The economist added that the rise in demand from Japan had occurred in a similar timeline to a rise in more institutional investment in Australia by large Japanese firms.
Ms Conisbee noted that when demand from China had surged to make it the dominant international investor into Australia’s housing market, many Chinese developers had commenced operations here.
With Japanese companies increasingly buying into major Australian builders, including the nation’s biggest operator, Metricon, in late 2024, it was possible that could lead to an increased appetite for Aussie homes for the nation.
Melbourne-based Grit Real Estate, which specialises in selling Australian properties to international buyers, believe that while Vietnam is the next biggest source of investment in latest FIRB data there is also a lot of money that could come this way from the Middle East, as well as Japan and India.
GRIT Real Estate boss Navin De Silva believes India, Japan and even Middle Eastern nations could become a rising force in Aussie property investment.
Grit founder Navin De Silva said with 780,000 Indian-born residents already living in Australia the nation’s exposure to Aussie property was on the rise.
“And gulf sovereign wealth funds and high-net-worth buyers from the UAE, Saudi Arabia, and Qatar are increasingly active in Australian luxury property,” Mr De Silva said.
When it came to the nation’s most likely to help drive Australia’s apartment markets in the future, he said that Singapore and the United States both had track records of significant investment into student housing and build-to-rent projects.
“But Japan is growing rapidly,” Mr De Silva said.
“Japanese institutional investors, life insurance companies and pension funds operating in a near-zero domestic rate environment, are actively seeking Australian real estate yield at scale,” he said.
Metricon’s sale to Japanese building giant Sumitomo Forestry in late 2024, added it to a list of other major Aussie builders including NextGroup and AV Jennings that are now owned by Japanese corporations.
Metricon chief executive Brad Duggan believes there could be a positive link between rising Japanese investment into Australian homes and their rising ownership of Australian builders.
Metricon chief executive Brad Duggan said his firm had been in the top three most profitable businesses for Sumitomo in the past financial year, which the Japanese company had recently celebrated.
With that announcement likely picked up in Japanese media, Mr Duggan said it was entirely possible Japanese investors were becoming more exposed to the idea of investing in Australian property.
“There’s a natural link between the fact that there are a number of really significant builders in Japan that now have interest in Australian builders — which might matter to investor communities in Japan,” he said.
Mr Duggan added that the backing of Sumitomo meant that they were also being exposed to Japanese and US builders’ ways of adding value for customers and that this had paired with their already strong relationships with major suppliers and tradespeople to ensure their prices for homebuyers had remained relatively stable for the past 18 months.
He added that while not their bread and butter, Metricon had a number of partnerships to build homes with firms that “have access to demand from international investors”.
Mr Duggan said while there was a bit of a lull in the aftermath of the federal budget, he wouldn’t be surprised to see a rise in investors buying new homes, even from abroad, once those changes were digested.
“There is a great shortage of homes in the country,” he said.
“I’m quite confident that the demand will return, particularly in Victoria where the macro-economic fundamentals are really strong and I’m really optimistic of what will happen ahead. But it will be a little bit rough in the next couple of months.”
Melbourne and Victoria could be a major beneficiary of future investment from foreign investors driving new home building, if it changes tax settings.
Mr De Silva added that Melbourne, as well as Sydney, were likely to remain major prospects for investment into Australian homes from abroad — high state taxes in Victoria as well as high prices in Sydney were beginning to turn them towards areas like Brisbane and Perth.
“A foreign buyer faces FIRB fees, state stamp duty surcharges, land tax, and a mandatory vacancy levy if the property sits empty,” he said.
“Layer those costs on top of Sydney’s median and the maths rarely works.”
The investor specialist said governments could easily increase international demand for Australian homes, and help support the construction of new residences, by pulling back on foreign-investor focused tax hits — and potentially reduce the cost of applying to purchase a home here via the FIRB.
With already high prices, Sydney’s housing market could need tax reform for foreign investors to bolster its supply of new housing.
“Australia is competing for foreign property capital against Dubai, which has zero acquisition tax, zero ongoing land tax, zero capital gains tax, and net yields of 8 per cent to 10 per cent,” Mr De Silva said.
“That is the alternative investors are seriously considering. The underlying case for Australian property is strong enough to win that competition, but not if the policy settings keep making it harder to participate.”
However, Ms Conisbee said that at present Australia was presenting a more challenging prospect to international investors as it was expected to record home value reductions and global investors were just as sensitive to this as local buyers.
Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.
MORE: Hells Angels’ set for massive windfall on Alphington house
English (US) · 