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Australia will not meet its housing targets while continuing to tax the capital needed to build new homes, the Housing Industry Association (HIA) warns in its latest Stamp Duty Watch report released today.
“Foreign institutional capital does not create housing demand. It creates supply,” Mr Reardon said.
“Taxing this capital reduces the supply of homes being built, even as migration continues to surge and create demand. This is the worst own goal in the myriads of housing policy mistakes.
The report also finds that the average stamp duty bill on a median-priced home has now reached $31,210 nationally, a record high and a 55 per cent increase since 2019. In Queensland, the burden has nearly tripled. These upfront costs are forcing Australians to take on greater levels of debt, reduce the quality of housing they can afford, or delay entering the market altogether.
State governments have introduced punitive stamp duty and land tax surcharges on foreign capital over the last decade, with rates now as high as 9 per cent in New South Wales and 8 per cent in Victoria. Foreign institutional investors in those states now face up to $160,000 in stamp duty, land tax and foreign investment fees on a typical new dwelling, up to four-and-a-half times the amount paid by local investors.
“These imposts are likely to be revenue negative. Foreign capital is highly liquid and has moved to other economies that are open to foreign capital building apartments to meet the needs of a growing population.
The report stresses the need to distinguish between foreign investors, who fund new housing, and temporary residents, such as international students, who consume it. Misunderstanding this distinction has led to contradictory policies that stimulate housing demand while simultaneously penalising those who finance housing supply.
“The combination of surging migration and stagnant home building, constrained by poor policy design, has left Australia in a housing deficit,” Mr Reardon said.
“Reversing the foreign capital exodus is not only a rational economic choice, but also essential to delivering the homes Australians need.”
The Winter 2025 report calls for a reset of national housing policy, including:
“Stamp duty continues to block mobility and lock buyers out of the housing market,” Mr Reardon added.
The Hunter region's largest and most successful home and renovation show, the HIA Newcastle HOMESHOW, is set to return on Saturday, September 13, 2025, at the HIA Home Inspirations centre in Mayfield West.
“The expansion of the Home Guarantee Scheme announced by the Minister for Housing, Clare O’Neil MP, to take effect from 1 October 2025, will reduce the time to save a deposit by up to four years,” stated HIA Senior Economist Tom Devitt.
“The Victorian government’s approach to publishing housing targets for each council to achieve is a positive step but will not by itself improve housing supply or affordability” stated HIA Executive Director, Keith Ryan.
“Harnessing artificial intelligence to drive a once in a generation overhaul of planning systems across the country could be the circuit breaker Australia needs to deliver 1.2 million homes over next 5 years” said Sam Heckel HIA Executive Director, Planning & Environment.