Foreign investment in Australian property nearly halves, with Chinese buyers still leading despite sharp declines in approvals
Foreign investment approvals for Australian residential property have significantly declined, with total approved proposals dropping to $4.7 billion in 2025-26.This marks a nearly 50% decrease from two years ago as the number of approved proposals also hit a three-year low.
The Quarterly Report on Foreign Investment from the federal Treasury showed a 4% decline from $4.9 billion in 2024-25 and a 29% drop from $6.6 billion in 2023-24.
In 2025-26, the count of approved proposals decreased from 5,581 in 2023-24 and 3,922 in 2024-25 to just 2,979.
Decline continues
The sharp decline points to tighter foreign investment regulations while not capturing the total demand from permanent residents or citizens.
China remains the top source of foreign investment, accounting for $900 million across 785 proposals despite a reduced presence.
Investment from China decreased significantly from $2.6 billion in 2023-24 to $1.4 billion in 2024-25, then to $900 million in the latest financial year.
Taiwan followed with $500 million, while Vietnam, Indonesia, and India contributed $300 million and $200 million each.
Industry experts attribute the downturn to increased restrictions and associated costs affecting overseas buyers.
Daniel Ho from Juwai IQI noted that many Chinese buyers await permanent residency to avoid foreign investment application fees.
He stressed that falling approval numbers do not fully reflect ongoing demand from overseas buyers.
The current restrictions on established home purchases extend until June 2029, leaving new housing as the main option for foreign investors.
Education and migration are significant factors driving interest in Australian property, especially from Chinese students.
In October 2025, there were 192,225 Chinese students in Australia, representing 23% of total international students.
The figures demonstrate a potential market of new migrants poised to buy property outside of foreign investment regulations.
The latest quarter also saw little change, with Treasury recording 656 approved proposals worth $900 million from April to June 2026.
