How Foreign Investment Is Influencing Australian Real Estate in 2025

Foreign investment has long played a significant role in shaping Australia’s real estate landscape, and in 2025, its impact remains as powerful—and as complex—as ever. As global economies recover, shift, and realign, overseas buyers continue to view Australia as a safe, stable, and attractive destination for property investment. But what does this mean for local buyers, investors, and the broader property market?

In this blog, we take a closer look at how foreign investment is influencing Australian real estate in 2025 and what trends are shaping this evolving dynamic.

Why Australia Remains a Hotspot for Foreign Buyers

Australia has built a strong reputation for its economic resilience, transparent legal system, and high standard of living. These factors continue to draw foreign investors, particularly from regions such as China, Singapore, India, the United States, and the Middle East.

In 2025, key reasons overseas investors are still attracted to Australian real estate include:

• Political and economic stability

• Strong population growth and rental demand

• World-class education and healthcare systems

• Consistent long-term capital growth

• Desirable lifestyle and liveability in major cities and regional centres

For many foreign investors, Australian property remains a reliable store of wealth and a hedge against volatility in their home markets.

Where Are Foreign Investors Buying?

While Sydney and Melbourne remain the most popular cities for foreign investment, 2025 is seeing increasing interest in other regions, driven by affordability and growth potential. These include:

• Brisbane and the Gold Coast, boosted by Olympic infrastructure and lifestyle appeal

• Perth, which offers value for money and strong resource-sector influence

• Adelaide, with its tech and defence sector expansion

• Regional hotspots with access to universities and lifestyle benefits

Luxury apartments, CBD properties, and new developments remain favourites, particularly among international buyers seeking education-related accommodation or long-term capital gain.

Government Regulations and Restrictions

Foreign investment in Australian real estate is tightly regulated. The Foreign Investment Review Board (FIRB) continues to oversee and approve purchases by non-residents. In 2025, policies remain in place to ensure foreign investment supports new housing supply and doesn’t disadvantage local buyers.

Key regulations include:

• Foreigners can generally only buy new or off-the-plan properties, not existing dwellings

• FIRB approval is required for all property purchases by foreign persons

• Application fees apply and have increased in recent years

• Foreign-owned properties left vacant may attract vacancy fees

While some of these rules are designed to balance demand, critics argue that loopholes and enforcement challenges still allow foreign investment to influence prices indirectly in key markets.

Impact on Property Prices and Supply

Foreign investment contributes to demand, particularly in the high-end and new apartment sectors. This can have both positive and negative effects:

• Increased demand in key areas can drive up prices, making it more challenging for local buyers to compete

• Incentivising new developments, which can help add to the housing supply

• Stimulating local economies, particularly through construction and job creation

However, when demand outpaces supply or foreign interest concentrates on specific suburbs, it can contribute to affordability pressures—especially for first-home buyers.

Trends to Watch in 2025

Some emerging trends in 2025 related to foreign investment include:

• Digital property purchases: Technology enables international buyers to transact remotely, increasing overseas demand

• Education-linked investments: Investors buying properties near universities for student accommodation or family use

• Diversification: Foreign investors spreading their portfolios across multiple Australian cities, not just Sydney and Melbourne

• Greater interest in green buildings: Environmentally sustainable developments are gaining appeal with global investors

What Does This Mean for Local Investors?

For Australian investors, understanding the trends behind foreign investment is crucial. Increased foreign interest in specific areas can drive competition, but it can also create opportunities. For instance:

• Investing in adjacent suburbs to foreign investor hotspots can yield strong capital growth

• Anticipating infrastructure and lifestyle upgrades driven by foreign interest can guide smart investment decisions

• Properties with international appeal (e.g., close to universities or CBDs) may retain long-term desirability

Final Thoughts

Foreign investment will continue to shape the Australian real estate market in 2025—bringing both opportunity and challenges. While government policy plays a role in balancing international interest with housing affordability, the demand from overseas buyers reinforces the strength and global appeal of Australia’s property market.

For local investors and homebuyers, staying informed about these trends allows you to navigate the landscape with confidence and make smarter, more strategic decisions.