Data shows where foreign property buyers are spending their money

Data analysis shows foreign buyers made up less than 1 per cent of property sales across Australia in 2021-2022, the most recent data published by the federal government shows.

The opposition's proposal to ban foreign investors from buying existing homes is unlikely to make "much of a dent" in the housing market, CoreLogic research director Tim Lawless said.

In his budget reply speech Opposition Leader Peter Dutton said the Coalition would propose a two-year ban on foreign investors and temporary residents from purchasing existing homes.

He has since conceded the number of foreign buyers was low, but told Nine "nonetheless it contributes to an overall shortage of housing in our country".

In the 2021-2022 financial year there were 584,580 residential property sales across Australia, CoreLogic data shows.

During the same period, 4228 residential real estate purchases were made with a level of foreign ownership, the latest Treasury data reveals.

The transactions totalled $3.9 billion.

It represents about 0.7 per cent of residential sales, however the Treasury data included vacant land where the CoreLogic data did not.

The majority of the 2021-2022 foreign purchases were in Victoria, New South Wales and Queensland.

However the ACT had the highest proportion of foreign buyers, based on the data analysis.

There were 206 foreign property purchases in the ACT in 2021-2022, representing about 2 per cent of total property sales for the year.

Most of the ACT purchases (142 homes) were for new dwellings.

The analysis showed foreign purchases made up about 0.4 per cent of total sales in NSW and 1.3 per cent in Victoria.

Western Australia had the lowest proportion of foreign buyers at just 0.3 per cent.

Most foreign investment in real estate is in new dwellings, given the federal government's policy is designed to increase Australia's housing supply.

Foreign buyers can only purchase an established property if they are temporary residents and will live in the home or if they are planning to redevelop the home.

In the 2021-2022 financial year, new dwellings and vacant land represented 68 per cent of foreign purchases.

Mr Lawless said banning foreign investment in existing homes was unlikely to "make much of a dent" given the small proportion of purchases they represented.

"I wouldn't say it's immaterial but it's a fairly low proportion of the overall market in turn that would be impacted by foreign buying activity," he said.

Mr Lawless said a level of foreign investment was "healthy" for the real estate market, but there were risks.

"Foreign buyers do play a role in supporting new dwelling completions and purchases," he said.

"A lot of developers rely on foreign purchasing demands to achieve their pre-sales and to support their sales targets for projects as well."

The potential for money laundering or investors who did not "play by the rules" presented risks, he said.

"It's important that stock isn't just being land banked or used to offshore capital; it is there for housing purposes," Mr Lawless said.

Recently introduced legislation meant foreign investors now face substantially higher fees if their properties sit vacant.