According to
realestate.com.au, approved foreign investment in Australian residential real estate totalled $4.7 billion in 2025-26, with Chinese buyers alone accounting for $900 million across 785 approvals despite the Albanese Government's established-homes ban remaining in force until June 2029. The figures, drawn from fresh Foreign Investment Review Board data released by Treasury, show a market still attracting substantial offshore capital — but one that is being funnelled almost entirely into new housing stock, with direct consequences for how that stock gets insured.
What the Treasury Data Actually Shows
The headline number is $4.7 billion in approved residential investment for the 2025-26 financial year, down 4 per cent from $4.9 billion the year before and well below the $6.6 billion recorded in 2023-24. China remained the largest single source nation by a wide margin, ahead of Taiwan at $500 million and Vietnam at $300 million, with Indonesia and India each contributing $200 million. The number of approvals has nearly halved over two years, falling from 5581 in 2023-24 to 2979 in 2025-26, a trend Juwai IQI co-founder Daniel Ho attributes to buyers waiting until they secure permanent residency before purchasing, which removes them from the FIRB count altogether.
Because the established-homes ban has been extended to 30 June 2029, Mr Ho noted that "new housing is the only door left open to foreign buyers," who now play a direct role in helping developers hit presale targets needed to get apartment and townhouse projects off the ground. That single structural fact matters more for insurance than any other detail in the data. Off-the-plan and newly completed developments carry a different risk profile to established dwellings — builder's warranty periods, defect liability, and strata scheme establishment all intersect with how a building is first insured, and a wave of foreign-backed presales concentrated in new strata towers adds volume to this segment of the market.
For buyers navigating this specific corner of the market — new-build apartments with a foreign capital base behind the original presale — the practical takeaway is to scrutinise the building insurance arrangement from day one of settlement, not after an issue arises. A development reliant on foreign presales to proceed is still a commercial construction project subject to the same defect and insurance risks as any other, and ownership structure at purchase has no bearing on the adequacy of the strata building policy once the scheme is registered.
Why the Shift Toward New Builds Matters for Insurers
Mr Ho's comments to realestate.com.au make clear that the ban has not reduced interest in Australian property so much as redirected it. Buyers "value its universities, its lifestyle, and its stability," he said, and what has changed "is not their interest in Australia but the way they buy." With established dwellings off-limits to non-residents, every foreign-sourced dollar captured in the FIRB figures is now, by definition, flowing into new construction — new apartment towers, new townhouse developments, and off-the-plan projects still mid-build.
This concentration effect has a compounding dimension once you factor in the 192,225 Chinese students cited in the article, representing 23 per cent of Australia's 833,041 international students. Many will eventually convert to permanent residency and buy established homes without appearing in FIRB data at all, but in the interim, demand for newly built apartments near universities continues to support presale volumes in precisely the asset class where strata insurance complexity is highest — multi-unit buildings with staged completions, shared common property, and builder defect exposure during the first years of a scheme's life.
Approved foreign investment in residential real estate has nearly halved in approval count over two years even as total dollar value remains above $4.5 billion, concentrating offshore capital into a shrinking number of larger, predominantly new-build transactions — precisely the segment of the market where strata and building insurance arrangements are most exposed during the early years of a scheme.
For existing owners in strata schemes that attracted heavy presale interest from offshore buyers, this is a reminder to check the building's insurance valuation regularly. Schemes that filled quickly via presale campaigns sometimes carry insurance sums fixed at the original build cost, which can lag well behind current reconstruction costs by the time a claim is needed — a gap that matters regardless of who originally purchased the units.
Background: Title Structure and Insurance Responsibility
New-build properties purchased under the exception are often sold under strata title rather than Torrens title, which changes who is responsible for what insurance. Under strata arrangements, the owners corporation — not the individual lot owner — is legally obliged to insure the building structure and common property, while owners remain responsible for contents and, in most states, internal fixtures. Understanding this split is essential for any buyer, foreign or domestic, entering a strata scheme for the first time. Our Strata Title vs Torrens Title Explained guide breaks down these ownership and insurance obligations in detail.
This distinction becomes especially relevant for permanent-residency buyers described in the Treasury data, many of whom are purchasing their first Australian property and may be unfamiliar with strata insurance structures that differ substantially from freehold ownership norms in their country of origin.
Practical Implications for Landlords and Buyers
For investors — local or newly arrived — buying into a development that leaned on foreign presales, the first insurance task is confirming the owners corporation has adequate building cover before settlement, since inadequate sums insured become every owner's problem after a major claim. Landlord insurance, which covers loss of rent, tenant damage and liability, sits separately from the strata building policy and remains the individual owner's responsibility regardless of how the unit was originally marketed or sold. Investors renting out units in newer towers should also check whether their landlord policy accounts for shared-wall and common-area liability exclusions that differ from standalone house policies.
Borrowing conditions tied to this cohort of buyers are also worth tracking. As loan lodgement data across the country continues to show tighter investor activity generally, those assessing finance for new-build strata purchases should factor insurance costs into serviceability calculations early — building insurance premiums for apartment towers have been rising in recent years, driven by reconstruction cost inflation and reinsurance pricing. Readers comparing financing structures across this segment can find current market data at REAStats, which tracks agent and transaction trends relevant to new-build precincts attracting offshore capital.
Finally, anyone purchasing in a development that courted foreign presale buyers to hit its construction funding targets should request the strata insurance certificate of currency and confirm the sum insured reflects current rebuild costs, not the figure set at the scheme's original registration. For a comprehensive overview, see our Property Insurance Guide, which covers landlord, strata and building insurance requirements across every Australian state.
The Treasury figures confirm foreign capital remains a fixture of Australian housing, just rerouted into new stock by policy design. Buyers and investors in that stock — whatever their citizenship status — carry the same obligation to get building and landlord insurance right from day one.
This article was produced with AI assistance and reviewed for accuracy. Content is for informational purposes only and does not constitute financial or property investment advice.
