Mortgage brokers dealing with offshore clients and new apartment projects are facing a changing mix of foreign buyers, as geopolitical tensions and higher costs reshape global capital flows into Australian real estate.
New analysis of Foreign Investment Review Board (FIRB) data cited by The Daily Telegraph and realestate.com.au shows overseas investors spent $3.7 billion on Australian residential property in the 2025 financial year, but agencies now report new activity is falling. China and Hong Kong, which together accounted for nearly two‑thirds of foreign buyers between 2016 and 2024, are leading the decline.
Agents also report softer enquiry from traditional Asian markets such as Singapore and Malaysia, while interest from countries including India and Vietnam has been steadier, creating a more fragmented buyer pool than during the previous China‑led boom.
Sydney project marketer Peter Li, co‑founder of Plus Agency, said the downturn in China’s own housing market is filtering through to Australian demand.
“The majority of Chinese are losing confidence in real estate because of the weak market in China,” Li told The Daily Telegraph, adding that falling prices at home have eroded would‑be investors’ equity and appetite for risk.
He said global uncertainty linked to the Iran war has accelerated the pullback.
“The war … has made everything uncertain. This feels exactly like the beginning of COVID,” Li said, noting that many Asian investors prefer to pause big decisions such as offshore property purchases until conditions stabilise.
FIRB figures cited in the report show China’s share of approved foreign residential purchases has more than halved compared with its peak, even as overall foreign spending remains concentrated in New South Wales, Victoria, and Queensland. Together, those three states continue to attract the vast bulk of offshore buyer interest despite the slowdown.
Those dynamics are playing out in a market where supply is already lagging, with housing completions down 1.7% in the December quarter to 43,536 and Australia about 77,500 homes short of the National Housing Accord target just 18 months into the five‑year plan. Construction costs have jumped around 1% since the Iran conflict began – adding at least $3,500–$4,000 to a standard four‑bed, two‑bath build and with key suppliers signalling rises of about 6% from 1 July – while national dwelling values are up 9.9% year‑on‑year, led by double‑digit growth in Perth, Brisbane, and Darwin.
While Chinese demand wanes, Plus Agency’s sister firm Plus Notable is seeing more interest from the Middle East, particularly Iran and Lebanon.
“The people inquiring about property are the ones trying to get themselves or their money away from conflict,” Li said.
Some members of the Iranian diaspora are purchasing Australian homes with or for family still based in Iran. According to Li, these buyers are motivated both by a desire to move wealth out of a war‑affected country and by expectations that conflict‑driven fuel and construction costs will push up prices for new or near‑new homes over time.
Much of this demand is being felt in Sydney’s north shore and inner‑west apartment corridors, as well as select off‑the‑plan projects in Melbourne’s CBD and fringe suburbs, where large, modern two‑bedroom units are proving popular with families planning a future move.
For mortgage brokers, the shift means fielding fewer investment enquiries from China and potentially more from Middle East‑based buyers and diaspora families, often focused on new stock that complies with FIRB rules and attracts higher property taxes.
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