Chinese Investors Exit Australian Property Market, Impacting Renters

Chinese investors are significantly reducing their holdings in Australian properties, a trend attributed to a protracted downturn in China's domestic real estate market. This withdrawal has led to a notable decrease in the number of homes owned by Chinese nationals in Australia.

Data from the Australian Taxation Office indicates a decline in dwellings owned by Chinese investors. In 2024, the figure stood at 23,550 properties, which subsequently fell by over five percent to 22,272 by 2025. This sell-off coincides with a severe slump in China's property market, which has seen prices drop by approximately 25 percent since the third quarter of 2021, erasing two decades of financial gains. Factors contributing to this domestic crisis include a shrinking population, an oversupply of housing, and the collapse of development companies following stricter government regulations. Fitch Ratings projects a further decline of 11-13 percent in China's property market for the 2026 financial year.

The Real Estate Institute of Australia has voiced concerns that this reduction in foreign investment could negatively impact renters. "Australia's housing ecosystem relies significantly on foreign cash to support it, and to ensure that the more than 7 million renters across Australia have access to adequate rental homes," stated chief executive Jacob Caine. He added that a decrease in the activity of this investor cohort, which has historically supported the Australian property sector, is concerning.

Adding to the outflow, Hong Kong buyers have also seen their property sales decrease from 3,486 to 3,396 between June 2024 and June 2025. This trend has contributed to an overall decrease in Chinese and Hong Kong investor portfolios in Australia.

Despite the retreat of Chinese and Hong Kong investors, the Australian property market is seeing an influx of capital from other nations, particularly Japan. Japanese investor purchases in Australia increased from 1,168 to 1,711 in the 2025 financial year. This surge has positioned Japan as the fifth-largest owner of Australian homes, surpassing the United Kingdom and the United States. Navin De Silva, founder of Grit Real Estate, noted that Japanese institutional investors, such as life insurance companies and pension funds operating in a low-interest-rate environment domestically, are actively seeking yields in Australian real estate.

This Japanese investment is also extending to the construction sector. In 2024, Japanese building giant Sumitomo Forestry acquired Australian construction company Metricon, following similar acquisitions of NextGroup and AV Jennings by Japanese conglomerates. Metricon CEO Brad Duggan indicated that the company is now positioned for partnerships with firms that can access demand from international investors.

Experts suggest that Australia could further attract foreign property capital by reviewing its tax laws for foreign investors and reducing the application costs associated with the Foreign Investment Review Board. De Silva pointed to Dubai as a competitor, offering zero acquisition tax, zero ongoing land tax, and zero capital gains tax, with net yields of 8-10 percent, presenting an attractive alternative for investors. He emphasized that while Australia's property market fundamentals are strong, policy settings that impede participation could hinder its ability to compete for global investment.