The 1 April legislative changes relating to foreign residents buying existing homes is shifting dynamics in property markets around Australia, reducing international attendance at open homes—yet local demand continues to hold firm.

Emma Challen, Principal of Raine & Horne Hunters Hill, said the change has eased international interest at open homes across Sydney’s prestigious northern markets, but local buyers haven’t missed a beat.

“The ban has taken overseas buyers out of the equation, but we’re still seeing strong interest from Chinese buyers with Australian passports, and local buyers have quickly filled any gap,” Ms Challen said.

“We’re still selling both on and off market sales, with solid auction activity. The pace has slowed slightly, but the market is far from soft.”

In Hunters Hill, where housing values typically range between $3 million and $5 million — Ms Challen says the market is driven by local upgraders, rather than overseas buyers.

Still, pricing remains crucial in Hunters Hill, according to Ms Challen. “Our market is unforgiving if you’re even 5- 10% overpriced,” she added. “But when the price is right, motivated sellers will still attract motivated buyers.”

Recent sales results demonstrate Hunters Hill’s market resilience. One standout was a large family home at 66 Park Road, Hunters Hill[i], a 1960s home, which achieved $4.815 million at auction. The property attracted four registered bidders and was sold by Ms Challen and her Raine & Horne Hunters Hill colleague David Neuhaus.

Another standout result was 1 Joly Parade, Hunters Hill[ii]— a 1960s home with water views and located near one of Sydney’s most prestigious private schools, St Joseph’s College — which sold for $3.96 million at auction, drawing 12 registered bidders. The sale held personal significance for Mr Neuhaus, who grew up just across the road from the property.

“These are record results for older homes in the area,” Ms Challen said, who noted a slight increase in days on market in Hunters Hill was due to election uncertainty – not the legislative change for foreign buyers.

“Everyone was holding their breath waiting for the Federal Election outcome,” Ms Challen said. “Now that we have a clear result, buyers and sellers can move forward with their property plans. A rate cut on 20 May would provide a further boost, especially now that the Coalition’s election pledge to let first home buyers access up to $50,000 from their super is off the table[iii].”

As for the foreign buyer ban itself, Ms Challen believes enforcement will be the true test. “The intent is clear—housing affordability is under pressure—but whether the government can monitor and enforce the ban effectively remains to be seen.”

Overseas landlords under pressure to sell

In the Inner West of Sydney, Kalaney Che, Principal of Raine & Horne Rhodes, said foreign investors are also feeling the pinch—but not from the buyer ban alone. 

“For many foreign investors, the bigger concern is the ongoing holding costs—particularly land tax imposed on foreign owners in NSW,” he noted.

The NSW foreign owner surcharge land tax applies to residential land in NSW owned by a ‘foreign person’. It is in addition to any regular land tax that may apply and is currently imposed at the rate of 5% of taxable land value[iv].

With the overseas investment properties we manage, rising holding costs—especially land tax and increasing strata fees—are prompting many foreign-based landlords to reassess their portfolios,” Mr Che said.

“Some overseas investors weren’t fully aware of the land tax surcharge and are now sitting down with their accountants, who are asking them whether they’ve paid it. If not, that looming liability is often the trigger to sell.”

 Mr Che added, “While perhaps an unintended consequence, the surcharge encourages more foreign owners to divest, increasing the supply of properties available to local buyers in the Rhodes market—which ultimately is the goal of the foreign investment ban.”

Adelaide market steady and ready for a rate cut

In Adelaide, James Trimble, General Manager of Raine & Horne SA, said the impact of ban was negligible. “Most of the buyers we’re seeing are permanent residents or Australian citizens,” he noted. 

 “We’ve seen only a slight drop in number of buyers at the weekend open for inspections over the last month or so.”

 Mr Trimble said recent dips in open home attendance were largely due to the Easter and Anzac Day holidays, followed by the Federal Election.

“What will make a real difference is growing confidence in the economy and the strong prospect of an interest rate cut in May, which will encourage more buyers and sellers to re-enter the market and help people move up the property ladder again,” he said.

 According to NAB’s latest forecast[v], the Reserve Bank could cut rates four times totalling 100 basis points by August—starting with a substantial 50 basis point cut on May 20. 

“For a mortgage of $600,000, that’s an annual saving of around $6,000,” Mr Trimble explained. 

For buyers currently able to borrow $600,000, lower rates could boost their borrowing power by an estimated $70,000—lifting their capacity to around $670,000 based on an interest rate of approximately 5%, according to analysis by Our Broker.

 
[i] https://www.raineandhorne.com.au/huntershill/properties/66-park-road-hunters-hill-2110-new-south-wales
[ii] https://www.raineandhorne.com.au/huntershill/properties/1-joly-parade-hunters-hill-2110-new-south-wales
[iii] https://www.liberal.org.au/our-plan/affordable-housing
[iv] https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/land-tax/surcharge-land-tax/what-is-surcharge-land-tax#heading3
[v] https://business.nab.com.au/nab-chief-economist-update-5-may-2025/