I. Key Points of Policy Content

 

on April 1, 2025, the Australian government announced the implementation of a two-year Temporary Ban on Foreign Purchases of Established Dwellings It aims to curb real estate speculation, stabilize housing prices and ensure the affordability of housing for residents. This policy was jointly issued by the Australian Treasury and the Foreign Investment Review Board (FIRB) and officially came into effect through the Official Journal of Australia. The main contents include:

 

1. Foreign investors are prohibited from purchasing existing residential properties (Established Dwellings). All non-Australian citizens and permanent residents (including temporary visa holders and foreign legal persons) are temporarily not allowed to purchase second-hand houses or completed houses. Policy validity period: From April 1, 2025, for a period of two years, that is, until March 31, 2027.

2. Allow investment in new housing and development projects. Foreign investors can still invest by purchasing "New Dwellings" or by participating in real estate development projects; Such investments must be approved by FIRB and comply with the current regulations on the disclosure of foreign shareholding ratios and sources of funds.

3. Exemption clause. Diplomatic institutions' housing, investment projects of listed companies in Macao, and social housing projects specially approved by the government can be exempted. Temporary residents who purchase newly built housing for their own residence can apply for exemption through special approval channels.

4. Implementation and supervision mechanism. The policy is implemented by FIRB and data monitoring is handled by the Australian Taxation Office (ATO). If purchased in violation of regulations, FIRB has the right to demand a forced sale and impose a fine of up to 25%.

 

Ii. Interpretation by the chivoy lawyers Team 

 

1. Policy background

Since 2023, house prices in Australia have continued to rise, with the median house prices in some major cities (such as Sydney, Melbourne, and Brisbane) reaching new highs. The Australian government believes that the entry of foreign capital into the existing residential market has exacerbated the tightness of housing supply, exerting pressure on local first-time home buyers and the rental market.

The Finance Minister emphasized at the policy press conference in April 2025: "This move aims to restore market balance and ensure that housing primarily meets the living needs of Australian residents rather than serving as a vehicle for speculative capital." At the same time, the Australian government also reaffirmed that this ban is not an "exclusionary policy", but a short-term regulatory measure to make room for a new round of housing construction and infrastructure investment.

 

2. Policy Objectives

•Stabilize housing prices and alleviate the housing shortage;

•Guide foreign capital to new projects and infrastructure construction to support the construction industry and employment;

• Enhance the transparency and enforcement of foreign investment supervision;

•Prevent speculative funds from flooding the housing market.

 

3. Impact on Chinese Investors

For Chinese investors planning to enter the Australian market through real estate, the impact of this policy is mainly reflected in three aspects:

 

(1) The channels for residential investment are restricted. Chinese individual and corporate investors are temporarily unable to directly purchase existing residential properties in Australia. If you wish to allocate residential assets, you must choose either "New Project" or "Pre-sale Property".

(2) Structural shift in investment direction. The policy encourages foreign capital to participate in new residential development, commercial real estate or infrastructure projects, and the approval procedures in these fields are relatively open. For Chinese real estate developers, this policy may instead bring about cooperative investment opportunities, such as participating in the project financing and construction of local Australian developers.

(3) Compliance requirements are more stringent. The FIRB approval process will focus on reviewing the transparency of the source of funds and the disclosure of the Ultimate Beneficiary (UBO). Investment projects should have long-term development plans rather than short-term trading intentions.

 

Under the current policy environment, Chinese investors can:

· Conduct compliance assessment in advance: clarify the investment category, property attributes, and whether exemptions are available;

· Cooperate with local developers: Participate in new projects through joint ventures or project financing forms;

· Improve the disclosure of funds and taxes: Ensure that the FIRB approval materials are complete and legal;

· Avoid speculative property purchase operations to prevent the risk of forced sale and fines.

 

In conclusion, the policy of "Prohibiting Foreign Buyers from purchasing Existing Residential Properties" is an important phased measure taken by the Australian government to regulate the real estate market. For Chinese investors, this means that real estate investment needs to be more focused on development-oriented, industrial and sustainable projects. chivoy lawyers will continue to follow up on FIRB-related announcements and implementation rules, providing cross-border investors with the latest policy interpretations and legal compliance support.