In the UK, domestic buyers are moving into some of London’s most exclusive neighbourhoods, including Belgravia, Kensington, and Knightsbridge, taking advantage of price drops triggered by the retreat of non-domiciled international investors. The Financial Times reports that new tax rules introduced by the Labour government in April have dampened interest from foreign high-net-worth individuals, many of whom are now looking to cities like Milan or Paris instead.
Properties in some of London’s elite areas are now trading for under £2,000 per square foot (approx. AUD$42,000 per sqm)—a level not seen in years.
Agents on the ground say properties listed for six to 12 months are finally selling, with some recording double-digit price reductions.
“Switched-on domestic buyers are seizing the moment while there’s less competition,” said Stuart Bailey, head of prime central London sales at Knight Frank.
At the same time, Australia has been undergoing a parallel reset.
Since April, the Federal Government has enforced a two-year freeze on most foreign purchases of established residential property, aimed at easing housing pressures for locals. The policy restricts access for non-residents and many temporary visa holders, effectively sidelining a once-reliable source of capital, particularly in the luxury apartment and trophy home markets.
A Shift in the Real Estate Narrative
What’s happening in London and Australia reflects a broader recalibration in global property markets. Where once foreign buyers were the assumed top-tier purchasers, tax and policy changes are shifting that balance. In both markets:
- Domestic demand is rising in premium segments once out of reach.
- Price adjustments are prompting a rethink among aspirational buyers.
- Developers and agents are focusing more heavily on local fundamentals: liveability, infrastructure, and demographic growth.
Lucian Cook, Director of Residential Research at Savills, told the Financial Times the balance of demand in London is “probably the biggest change in the prime market.”
That same sentiment could now apply to Australia, where local owner-occupiers and investors are stepping into spaces once dominated by offshore capital.
For Australian agents, especially those in prestige and inner-city apartment markets, the takeaway is clear: while the temporary lockout of international buyers may have felt restrictive, it’s also created space for a more localised recovery.
