Chinese investors sold off a net total of approximately 2,800 Australian residential properties during the 2024 financial year, according to data from the Australian Taxation Office (ATO) and the Foreign Investment Review Board (FIRB). While investors from China remain the largest foreign owner group with 22,272 properties, the sell-off marks a 5.4 per cent decline in their holdings, reflecting shifting economic conditions both in their home market and within Australia’s regulatory environment.
Shifting Foreign Ownership Dynamics
The latest Register of Foreign Ownership of Australian Assets reveals that while Chinese investors are retreating, the total volume of foreign-owned homes in Australia actually increased slightly, rising to 40,460 by the end of the 2025 financial year, up from 40,177 the previous year. This indicates a rotation of capital rather than a complete withdrawal of international interest.
Japan has emerged as a significant riser, with its investor base growing from 1,168 to 1,711 properties. This surge has propelled Japan to the fifth-most prolific foreign owner, overtaking both the United Kingdom and the United States. Singapore remains a major player with 1,978 properties, while Malaysia saw a slight decline to 1,795.
Did you know?
Victoria currently hosts the largest concentration of foreign-owned residential property in Australia, with 16,403 homes, followed by New South Wales (9,198) and Queensland (8,465).
Why Chinese Investors Are Selling
Real Estate Institute of Australia chief executive Jacob Caine attributes the sell-off to China’s domestic property market crisis, characterized by significant oversupply. Ray White Group chief economist Nerida Conisbee supports this view, noting that Australia has also “actively pushed” these investors out through tougher tax settings.
“It’s a more challenged economy, and property in particular isn’t as good an investment given what’s happened in China,” Ms. Conisbee said. She noted that international capital is highly sensitive to tax treatment, and if investors find more favorable conditions elsewhere, they will shift their focus accordingly.
The Rise of Japanese Institutional Investment
The growth in Japanese investment is closely linked to the increased presence of Japanese corporations in the Australian construction sector. In late 2024, Japanese building giant Sumitomo Forestry acquired Metricon. Metricon CEO Brad Duggan suggests this corporate alignment has increased the visibility of the Australian market to Japanese investors.
“There’s a natural link between the fact that there are a number of significant builders in Japan that now have interest in Australian builders,” Mr. Duggan said. He noted that Japanese life insurance companies and pension funds, operating in a near-zero domestic interest rate environment, are actively seeking the yields offered by Australian real estate.
Investment Competition and Regulatory Hurdles
Navin De Silva, founder of Melbourne-based Grit Real Estate, warns that Australia faces competition for global property capital from regions like the Middle East. He points out that countries like the UAE, Saudi Arabia, and Qatar offer more competitive tax environments, including zero acquisition or capital gains taxes.
“A foreign buyer faces FIRB fees, state stamp duty surcharges, land tax, and a mandatory vacancy levy,” Mr. De Silva said. He argues that if government policy continues to increase these costs, particularly in high-priced markets like Sydney, investors may pivot toward more accessible jurisdictions.
Investors looking for alternatives to Sydney and Melbourne are increasingly turning their attention to Brisbane and Perth, where lower entry prices and different state tax structures may offer better mathematical returns.
Frequently Asked Questions
Which country owns the most Australian residential property?
Investors based in the People’s Republic of China remain the largest foreign owners, holding 22,272 properties as of June 30, 2025, accounting for over 55 per cent of all foreign-owned homes.
Is foreign investment in Australian housing increasing or decreasing?
The total number of foreign-owned homes in Australia increased slightly to 40,460 in the 2025 financial year. While Chinese and Hong Kong-based ownership has declined, there has been a significant rise in investment from Japan, Singapore, and emerging interest from India and Middle Eastern sovereign wealth funds.
Why are Japanese investors becoming more active in Australia?
Japanese institutional investors, including pension funds and insurance companies, are seeking better yields than are available in their domestic market, which has featured near-zero interest rates. Additionally, major Japanese firms have acquired Australian builders like Metricon, increasing the profile of the Australian market.
Are you observing shifts in your local property market? Share your thoughts in the comments below or subscribe to our weekly newsletter for the latest updates on Australian real estate trends.
Worth a look