Chinese Investments on Aussie Houses Plunged 31 B$

(Nathan Mawby’s post from the REALESTATE.COM on 11 June 2026.)

$31bn plunge in Chinese investors will hurt Aus housing, experts warn: A decade after major tightening of foreign investment rules in Australia the nation has had a more than $65bn cut to funds coming in — spearheaded by China.

China-based property buyers have made moves on $200m worth of Aussie homes in the first three months of 2026. But it’s a fraction of what they used to spend, with Australia on track to receive $31bn less in investment from the Asian superpower into its property market compared to 2016.

Latest figures from the Foreign Investment Review Board show Chinese investors are on track to buy in the vicinity of $1bn worth of residential homes here in the current financial year. In the 2015-2016 financial year they sought to buy a jaw-dropping $31.912bn worth of Aussie homes.

And property industry experts have warned the staggering loss of capital appears set to hurt Australian home buyers and renters. The latest FIRB data shows that so far this financial year there has been just $3.7bn put on the table to support the nation’s housing market from investors abroad requiring government approval. It equates to 2326 homes.

That includes $1bn in the first three months of 2026 — and a repeat of that in the next three months would bring the 2026 financial year closer to a $4.7bn total. Across the 2015-2016 financial year, when foreign investment in Australian housing peaked, the total amount from across the globe was a whopping $72.4bn.

That accounted for 29 per cent of the national total of foreign investment, and made it the largest single category in FIRB data. On December 1, 2015, the Australian government tightened its foreign investment laws to limit offshore investors to purchasing new homes.

China was and remains the dominant force in international investors buying into the nation’s housing market, and since the start of the current financial year, July 1, 2025, they’ve sought to buy 638 homes worth a combined $800m. It’s likely they will end the current financial year close to the $1bn mark, based on recent quarters’ data.

Other major players so far this year include Taiwan, an independent nation off the coast of China that has been the subject of consistent concerns it will be invaded by the superpower, which was behind 285 home purchase attempts so far this financial year, worth in the vicinity of $400m.

China remains the biggest investor in Australian homes from abroad, but its numbers are massively down from years gone by. Vietnamese investors also sought to acquire about $200m worth of Aussie homes, equating to 237 residences, in the same timeline.

Indonesia was next with 112 proposals, worth about $100m, followed by Hong Kong-based buyers who added 127 purchases to the tally worth $100m. India was the sixth biggest foreign investor in Australian homes at $100m, and 177 proposals, in the same timeline.

Foreign investors seeking to purchase Australian homes can only buy new ones under the nation’s property laws, effectively forcing them to help increase the nation’s housing supply. Real Estate Institute of Australia president Jacob Caine said larger volumes of offshore funding could have a dramatic impact on the housing economy.

“It’s important to remember that foreign investment in the Australian housing market is invaluable in helping to underpin adequate supply and contributing to controlling affordability,” Mr Caine said.

“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.”

Mr Caine pointed to the Victorian experience, with the state attracting the largest share of the investment in the 2016 financial year, about $28bn, which had underpinned significantly higher increases in the supply of new housing across the state than other parts of the country. “And the result of that over performance was more affordable housing, cheaper rent and a market that better serviced Victoria,” he said.

Ray White chief economist Nerida Conisbee said the massive reduction in the past decade could provide insights into what would happen to the numbers of local investors as state and federal governments continued to remove incentives and increase taxation on them.

Key reasons for the decline in foreign investment in Australian housing include increased taxation on them by state governments, limitations to only purchasing new homes, and the Chinese government putting in additional capital controls on funds leaving its country.

Foreign investors are now only allowed to buy new builds, in a bid to increase the nation’s housing supply. In 2025, the Australian government also extended its controls on foreign purchases of homes. “They have been trying to discourage it for a long time now,” Ms Conisbee said.

“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.”

The economist noted that recent federal budget announcements would not stop local investors who wanted to purchase new homes, as their tax treatment would not be changed, those investors now knew that they would not be able to sell to another investor — and that confidence among investors had taken a hit as a result.

“People don’t understand the role money plays in creating housing,” Ms Conisbee said.“They’re now trying to discourage local investors. Who else is going to provide the funding?”

Experts believe that harnessed the right way, foreign investment could help with Australia’s housing crisis by funding more construction. Noting that people would not always want to invest in Australian property if it became increasingly difficult for them to see a way to make a profit, she said while it was hard to tell if local investors would fall away at the same rate as the international ones had, “there will be a drop off, for sure”.

The latest FIRB data also shows there was a further $8.6bn invested into Australia’s commercial property market in the first quarter of this year. It covered 266 proposed investments.