Chinese investors are withdrawing from Australia and selling up their properties as a market crash wreaks havoc in their home country.

Chinese buyers have been one of the biggest groups of foreign investors Down Under however the number of homes owned by them has fallen over the last few years.

Australian Taxation Office data showed there were 23,550 dwellings owned by investors in 2024, before the figure dropped more than five per cent to 22,272 in 2025.

China’s property market has been in a freefall since 2021, with prices crashing 25 per cent since Q3 2021, representing 20 years of real financial gains lost. 

The dramatic drop has been caused by a perfect storm of a shrinking population, an oversupply of housing, and the collapse of development companies in the face of stricter government regulations.

Fitch Ratings estimates that the Chinese market will drop another 11-13 per cent in the 2026 financial year. 

Real Estate Institute of Australia chief executive Jacob Caine warned that the Chinese sell-off in Australia would sting renters.

‘Like it or loathe it, 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,’ he told realestate.com.au.

Australian Taxation Office data showed there were 23,550 dwellings owned by Chinese investors in 2024, before the figure dropped over five per cent to 22,272 in 2025 (stock image)

‘So, it’s concerning to see less of that cohort that, in recent decades, have been very active and that has contributed to the health of the Australian property sector.’ 

Ray White Group chief economist Nerida Conisbee added that Australia had ‘actively pushed (Chinese buyers) out’ due to domestic tax laws.

Hong Kong buyers are also exiting, with sales falling from 3,486 to 3,396 between June 2024-2025.

Despite this, the 2025 financial year saw an increase in offshore owned properties.

As Chinese investors exit, others are moving in, with Japanese buyers leading the charge.

Japanese investor purchases rose from 1,168 to 1,711 in the 2025 financial year.

Japan is now the fifth-most prolific owner of Australian homes, having overtaken the United Kingdom and USA.

‘Japanese institutional investors, life insurance companies and pension funds operating in a near-zero domestic rate environment, are actively seeking Australian real estate yield at scale,’ Grit Real Estate founder Navin De Silva said.

China’s property market has been in a freefall since 2021, with prices crashing 25 per cent since Q3 2021, representing 20 years of real financial gains lost (pictured, Beijing)

Chinese and Hong Kong investors are starting to downsize their portfolios, while Japanese buyers are increasing their property purchases in Australia, entering the top 5, ATO data from 2025 shows (above)

That investment is also spreading to the construction sector.

Construction company Metricon was bought by Japanese building giant Sumitomo Forestry in 2024, joining NextGroup and AV Jennings as Australian firms owned by Japanese conglomerates.

‘There’s a natural link between the fact that there are a number of really significant builders in Japan that now have interest in Australian builders – which might matter to investor communities in Japan,’ Metricon CEO Brad Duggan said.

The sale has opened up Metricon to partnerships to build homes with firms that ‘have access to demand from international investors’.

DeSilva added that Australia could further increase investor and construction demand by winding back foreign-investor tax laws, as well as reducing the cost of applying to purchase a home in Australia via the Foreign Investment Review Board (FIRB). 

‘Australia is competing for foreign property capital against Dubai, which has zero acquisition tax, zero ongoing land tax, zero capital gains tax, and net yields of 8 per cent to 10 per cent … (which is) an alternative that investors are seriously considering,’ he said.

‘The underlying case for Australian property is strong enough to win that competition, but not if the policy settings keep making it harder to participate.’