Foreign investors will be funnelled into new construction and build to rent programs under a new plan from the Albanese government.
While Australians will benefit from increased fees lumped on international buyers, the hope is more investment means more desperately needed housing stock.
Treasurer Jim Chalmers said the move was “about building more homes and getting more rental properties for more Australians.”
“We want to take a system that is already tight and make it tighter and we think the best way to do that is to change the incentive,” Chalmers said.
Under the plan, fees will be tripled for foreigners buying established homes, then doubled again for any foreign-owned home left vacant.
“This is about building more homes and getting more rental properties for more Australians,” Chalmers said.
In contrast foreigners investing in the construction of build-to-rent projects will have their fees cut.
Only certain visa holders that study or work in Australia will be able to purchase existing homes.
Nationals leader David Littleproud criticised the plan as not going far enough.
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“I don’t understand why we’re not just banning or suspending foreigners buying residential homes for them to live in,” he said.
“Why wouldn’t we just take this step not to allow somebody the luxury of just flying in for a couple of months a year when there are Australians who are unable to get into the housing market?”
The government doesn’t know how many extra properties will be available but estimates an extra $500 million for the budget bottom line.
Economist Dr Andrew Wilson, co-director of the Menzies Centre for Health Policy and Economics said any action governments could take to improve the supply of housing was a positive.
“We need hundreds of thousands of new properties, maybe even millions,” he said.
With vacancy rates low, more Australians are living with multiple generations under one roof or not leaving home in the first place.
Even with incentives, increasing supply will take time but changes to demand could be quicker.
The government will outline its new migration strategy on Monday.
