Purchases of Australian property by overseas investors have plunged after the government announced a ban on foreigners buying Australian homes, Australian Associated Press reports.
The number of investment approvals fell by more than 22% to 5284 in 2024/25, the Productivity Commission found in its annual trade and assistance review.
The decrease was almost entirely attributable to the fall in residential real estate approvals, it said.
In the May budget, the Albanese government extended the ban on foreign purchases of existing homes by two years and three months until June 2029.
But with the ban not coming into force until April 2025, the Productivity Commission said the full impact would not be seen until the next financial year.
The value of foreign investment into Australia still grew by 32% to $256.4bn in 2024/25 with commercial approvals accounting for 98% of the total value.
The figures came as parliament passed legislation ensuring foreign residents also had to pay a 30% tax on capital gains.
The laws included an amendment initiated by the crossbench extending a 15% capital gains tax concession for foreign investors in renewable energy projects by an extra 10 years, so as not to discourage investment in Australia’s energy transition.
“After consulting with stakeholders, we’re providing a concessional period for these investments to 2040 to more closely align with the investment horizons typical of renewable energy projects,” treasurer Jim Chalmers said in a statement.
