Attracting international capital
24.11.2025 - 04:43
International investment has powered Australia's property sector, with international investors providing $1 in every $3 of institutional property investment over the past ten years. Yet in recent years, Victoria and Queensland have introduced additional taxes on these investors. This report examines a critical question: are these taxes deterring the investment Australia needs to build cities, create jobs, and support economic growth? Commissioned by the Property Council of Australia, the analysis reveals that Victoria has seen global institutional investment plummet by 53% since 2022, coinciding with rising tax rates. Queensland shows similar stagnation despite strong economic conditions. Through economic modelling and case studies of stalled projects - from student accommodation to industrial estates - the report quantifies what removing these surcharges could mean for Australia's economic future and competitiveness in attracting international capital.
Global investment makes up 29% of institutional investment in the property sector and has increased access to credit, boosted investment and supported Australian jobs
Australia has historically relied on international investment to bridge the gap between domestic savings and capital requirements, with international investors providing 29% of institutional property investment over the past decade, approximately $1 in every $3. This capital has been essential for building cities, funding infrastructure, and supporting employment across the country.
The United States dominates as the source of this investment, providing over 60% of global institutional capital flowing into Australian property. This investment has traditionally centred on New South Wales (50% of all foreign investment) and office assets (45%), though it spans all property types from industrial facilities to student accommodation.
Taxes imposed on global institutional investors in Victoria and Queensland are deterring investment
Victoria and Queensland have introduced additional taxes specifically targeting global institutional investors that go beyond what other states impose. The consequences are stark. Victoria has experienced a 53% decline in global institutional investment since 2022, falling from $10 billion to $5 billion. Queensland shows no growth despite strong economic tailwinds. Both states now receive 40% less foreign investment per capita than New South Wales. The report documents real casualties: a 201-bed student accommodation project in Melbourne indefinitely postponed, industrial investors exiting Victoria entirely, and millions redirected to overseas markets.
Removing taxes on global institutional investors will unlock $8.1B in investment, add $3.6B to GDP and support 8,400 Australian jobs
Economic modelling reveals that removing these surcharges would generate substantial returns:
- $8.1 billion in additional investment from 2026 to 2030
- $3.6 billion added to GDP nationally
- 8,400 jobs supported across the economy
The benefits far outweigh the costs. Victoria could see up to $10 in gross state product for every $1 of foregone tax revenue, with the state capturing $5.7 billion in investment and supporting 5,900 jobs. Queensland would gain $1 billion in investment and 1,000 jobs. To put this in perspective, the economic impact equals 6.2 times the annual contribution of the Australian Open to Victoria and would support 1.4 times the jobs created by the West Gate Tunnel Project.
Read and download the full report here.
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