 "Australia slaps 2-year ban on foreigners buying properties in the country ahead of polls")
The Australian government is all set to slap a 2-year ban on foreigners buying established houses in the country. The initiative is seen as a part of the government’s election pitch to control the surging home prices. Australia’s Housing Minister Clare O’Neil announced on Saturday that from April 1, foreign investors will be banned from buying established property until March 31, 2027.
After the deadline, she stated that the restriction would be reviewed to determine whether it should be extended. In a televised address on the Australian Broadcasting Corp (ABC), O’Neil made it clear that the ban is most likely to free up around 1,800 properties per year for local buyers.
“These initiatives are a small but important part of our already big and broad housing agenda which is focused on boosting supply and helping more people into homes,” the minister said in her statement.
About the Australian housing crisis
It is pertinent to note that Australia’s housing is touted as one of the most unaffordable in the world so much so that property prices will be a key issue in the upcoming election. The country is also struggling with a broader cost-of-living crisis, especially among young voters who fear they will never be able to buy a home.
Just in Sydney, the values of the properties have jumped to almost 70 per cent over the past 10 years. The median dwelling price is now around A$1.2 million (US$762,000), according to property consultancy CoreLogic Inc. This has also led to a spike in rent on these properties.
However, many believe that the ban is likely to have a marginal effect on the prices. According to Bloomberg, overseas investors bought A$4.9 billion of residential real estate – including vacant land, and new and established dwellings – in the 12 months ended June 30, 2023. Meanwhile, established dwellings accounted for about one-third of the total.
The announcement of the ban came just months after the Australian government recently passed housing reforms, including a shared equity scheme and tax incentives for developers, to ease cost pressures and achieve a target of building 1.2 million new homes by 2030. The country is scheduled to go to polls before the deadline of May 17 and the cost of housing remains one of the top three issues this elections.
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