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Why restricting foreign investors could damage Australia’s economy

By Hannah Blackiston 23 March 2017 | 1 minute read

A federal government proposal regarding foreign investment restrictions could be potentially disastrous for the Australian economy, according to one property agency.

Why restricting foreign investors could damage Australia’s economy

iBuyNew CEO Mark Mendel said that foreign investors already face enough roadblocks when it comes to investing in Australia, and any more could prove detrimental for the property industry.

Mr Mendel said that the plans to restrict foreigners from buying more than half the homes or apartments in any new development will discourage offshore developers from choosing Australia to do business.

“Enough is enough. The roll-on effect if this latest proposal is included in the May budget could be an economic disaster for Australia,” said Mr Mendel.

“This is just a ploy from the government to make it look like they are doing something for first home buyers but it will just discourage offshore developers from investing in Australia,” he said.

“The foreign buyer restriction could be the last straw and could result in driving away foreign buyers investing in Australian property. Excessive surcharges and further restrictions on foreign buyers could also lead to fewer international students coming to Australia as well as a slower population growth and a rise in unemployment.”

Mr Mendel said taxpayer money would be better spent attempting to fix housing affordability in other ways, such as supporting first time buyers.


“Before 2009, there was a regulation that meant developers could only sell half of their new dwellings in any development to foreign buyers,” said Mr Mendel.

“But this all changed when the global financial crisis (GFC) hit and the then Labor government decided to abolish the foreign limit for off-the-plan properties. This meant foreign buyers could buy whole developments if they were marketed both locally and overseas,” he said.



An investment is an asset or item purchased with the expectation that it will generate income or appreciate in value in the future.


Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.

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Why restricting foreign investors could damage Australia’s economy
Why restricting foreign investors could damage Australia’s economy
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