Foreign property approvals fall
Purchases of Australian property by overseas investors have fallen sharply after the government announced a ban on foreigners buying established Australian homes.
The ban was first announced in February 2025 and came into effect two months later.
In the May 2026 budget, the Albanese government extended the ban on foreign purchases of existing homes by two years and three months, until June 2029.
The decrease in purchases by foreign investors was almost entirely driven by a fall in residential real estate approvals, with .the number of approvals falling by more than 22% to 5284 in 2024-25, according to the Productivity Commission’s annual trade and assistance review.
Commercial investment still grows
Despite the fall in property approvals, the value of foreign investment into Australia still rose 32% to $256.4 billion in 2024-25, the report found.
Commercial approvals accounted for 98% of the total value.
Tax changes clear parliament
The figures came as parliament passed legislation ensuring foreign residents also had to pay a 30% tax on capital gains.
The laws included a crossbench-backed amendment extending a 15% capital gains tax concession for foreign investors in renewable energy projects by an extra 10 years.
Treasurer Jim Chalmers said the change was designed to avoid discouraging 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,” Chalmers said.
Francesca Muskovic, policy director for the Investor Group on Climate Change, said the amendment removed uncertainty for investors.
“This change avoids what would have been an unforced error in cruelling desperately needed investment - to drive down pressure on energy prices and help grow new industries supported by cheap clean energy,” she said.
Industry support narrows
The Productivity Commission’s report found the government’s Future Made in Australia agenda drove a 6.4% increase in industry budgetary assistance to $16.8 billion in 2024-25.
The agenda is aimed at boosting investment in projects such as clean energy and minerals refining.
But the report warned government assistance was increasingly being targeted at specific industries, rather than broader funding for areas such as research and development.
That could create market distortions by favouring some parts of the economy over others.
