Sydney has one of the most expensive property markets on earth, a bureaucratic framework specifically designed to make foreign buyers feel mildly unwelcome, and a median house price that crossed $1.7 million at its late 2025 peak. It is, in other words, not the easiest place to buy your first home. It is also one of the most sought-after real estate markets on the planet, for reasons that become obvious approximately thirty seconds after you arrive. People have been doing this for decades, and with the right preparation, so can you.
The first thing to understand is that the rules changed significantly in April 2025, and changed again in ways that matter.
Australia’s Foreign Investment Review Board – universally known as FIRB, and pronounced with the resigned familiarity of someone who has spent considerable time on hold – oversees all foreign property purchases in the country. As of April 2025, the Australian government introduced a two-year ban on foreign investors purchasing established dwellings, running until March 2027. This applies to most foreign buyers, including temporary residents.
In plain English: if the property already exists and someone has previously lived in it, you almost certainly cannot buy it right now. What you can buy is new property – off-the-plan apartments, newly completed developments, or vacant land on which you intend to build. There are some exceptions, including certain cases involving temporary residents with eligible visas, but these are limited and come with strict conditions. Taking proper legal advice before you get attached to any particular property is not optional; it is the only sensible place to start.
FIRB Approval: The First Hurdle
Before any foreign buyer can purchase property in Australia, FIRB approval is required. The application is submitted online, is assessed on a case-by-case basis, and the fee is non-refundable regardless of outcome. For a property under $1 million, the FIRB application fee currently starts above $13,000. It rises from there, steeply, for higher-value purchases. Budget for this before you budget for anything else.
The approval process typically takes 30 days, though it can run longer for more complex applications. You cannot sign an unconditional contract before receiving approval – a mistake that has caught out more than one overseas buyer and resulted in forced sales and penalties. Apply early, apply properly, and keep copies of everything.
The Tax Situation (Brace Yourself)
Standard stamp duty in New South Wales operates on a sliding scale, ranging from around 1.25% at the lower end to 5.5% for most residential purchases – on a $1.5 million property, that is roughly $65,000 before you have even thought about furniture. Foreign buyers then pay an additional surcharge on top of this, which rose to 9% from January 2025, making NSW the highest surcharge rate of any Australian state. On that same $1.5 million property, the foreign surcharge adds another $135,000. The total tax bill for a foreign buyer in Sydney on a $1.5 million purchase can therefore comfortably exceed $200,000 before any other costs are factored in.
There is also an annual land tax surcharge for foreign owners of 4% of the property’s value per year, and a federal vacancy fee if the property is left unoccupied. The Australian Taxation Office takes a dim view of empty investment properties and has the tools to identify them.
Capital gains tax applies when you eventually sell. Foreign residents cannot claim the main residence exemption, even if they have been living in the property throughout their ownership. This is worth knowing well in advance, as it affects the long-term economics of the purchase considerably.
Getting a Mortgage
Foreign buyers can obtain mortgages from Australian lenders, but the conditions are considerably more restrictive than for Australian residents. Most lenders will cap loans to foreign buyers at 70% of the property’s value, meaning a 30% deposit is typically required, plus all of the taxes and fees described above. Overseas income is assessed differently by each lender, and some banks simply will not lend to non-residents at all. Using a mortgage broker with specific experience in non-resident lending is strongly advised; it is a specialist area and the wrong lender can cost considerably more than the broker’s fee.
The Buying Process
Sydney’s property market operates predominantly through auctions, which can be a jarring experience if you are used to private treaty sales. Properties are marketed over a three-to-four week campaign, buyers attend an open house or two, and then everyone turns up on a Saturday morning to bid against each other in public. Auctions are unconditional – there is no cooling-off period, and if your bid wins, you are legally committed to the purchase. FIRB approval must therefore be in hand before auction day.
For off-the-plan purchases, which are currently the primary route for foreign buyers, the process is somewhat different. You agree to buy a property that does not yet exist, based on plans and specifications, with settlement occurring when construction completes – often one to three years later. Prices and conditions can shift considerably in that time. Engaging a solicitor to review the developer’s contract carefully is not something to economise on; off-the-plan contracts heavily favour the developer by default.
A buyer’s agent – a licensed professional who acts exclusively for the buyer rather than the vendor – is worth serious consideration in a market as competitive and opaque as Sydney’s. They have access to off-market listings, understand which developments offer genuine value and which are overpriced shiny brochures, and can negotiate on your behalf with the particular ferocity the market requires.
The Market Right Now
Sydney’s median dwelling value sits around $1.29 million, with houses considerably higher. Greater Sydney’s median house price hit a record of $1,759,909 in late 2025, though values have softened slightly since. The rental vacancy rate remains extraordinarily tight at around 1.1%, meaning that if you are buying as an investment, tenant demand is not a concern in any meaningful short-term sense.
For foreign buyers focused on new developments, the outer and mid-ring suburbs of Western Sydney have seen strong growth and offer price points well below the inner-city premium. Areas around Parramatta – Sydney’s second CBD – have attracted considerable developer activity and offer a more accessible entry point into the market without sacrificing connectivity.
None of this is simple. But then, property markets that are simple tend not to appreciate at the rate Sydney’s has over the past three decades. Come prepared, come with good legal and financial advice, and come with a clear understanding of the costs before you fall in love with the view.
