Chinese property investment in Australia has collapsed. Where investors from China once sought to acquire $31.9 billion worth of Australian homes in a single financial year, the latest Foreign Investment Review Board data puts them on track to spend roughly $1 billion in the current year — a decline that property experts warn is actively working against the country's housing supply and affordability goals, Herald Sun reported.
The broader foreign investment picture tells the same story.
At the peak in 2015-16, total foreign investment in Australian housing reached $72.4 billion — accounting for 29% of the national total and making it the single largest category in FIRB data.
A decade on, the global total has shrunk dramatically, with just $3.7 billion committed by offshore investors so far this financial year. Chinese buyers, who remain the dominant foreign cohort, have contributed $800 million across 638 proposed purchases since July 2025.
The retreat began with Chinese government capital controls tightening the flow of money leaving the country — compounded by state government surcharges on foreign buyers and the federal restriction, introduced on 1 December 2015, limiting offshore investors to new builds only.
In 2025, the Australian government extended its ban on foreign purchases of established homes, adding a further layer of restriction. The cost burden on foreign buyers has become substantial — surcharges now commonly add 7%–9% to non-resident purchases, leaving many paying 15%–25% more upfront than local buyers.
Real Estate Institute of Australia president Jacob Caine (pictured left) argued the restrictions have backfired.
"Whilst the government restrictions on foreign investment in theory contribute to a more level playing field for Australian residents, in practice they undermine housing affordability targets and the ultimate goal of an equitable housing system," Caine said.
He pointed to Victoria's experience during the 2016 peak — when the state attracted around $28 billion of the national total — as evidence that foreign capital, channelled into new builds, produced more housing, cheaper rents, and better affordability outcomes.
The supply cost is already measurable: the National Housing Supply and Affordability Council forecasts just 938,000 home completions against the government's 1.2 million target by June 2029 — with net new supply projected at only 825,000 after demolitions. The HIA argues foreign investor taxes are directly contributing to that gap.
Ray White chief economist Nerida Conisbee (pictured right) drew a pointed parallel between the decade-long retreat of foreign investors and the trajectory now facing domestic property investors under the federal government's budget changes — a pattern, she suggested, that now appears to be repeating.
"They have been trying to discourage it for a long time now," Conisbee said of offshore investment. "But the only time we got close to building 1.2 million homes over five years was a period we had significant foreign investment. Provided you harness it in the right way, it can be effective for getting homes built."
She was direct about where that leaves domestic investors.
"People don't understand the role money plays in creating housing," Conisbee said. "They're now trying to discourage local investors. Who else is going to provide the funding?"
The data tells a sobering story for brokers: foreign capital has been contracting for a decade, domestic investor incentives are now being wound back, and the consequences for supply, rents, and affordability are likely to compound.
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