Foreign investors not driving australian buyers out of homes

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House prices have surged Down Under in the past year, accompanied by an equally significant growth in overseas capital entering the market. That rise in international investment, principally fuelled by Chinese and Asian buyers, has been linked by many to the increasing values, which have left domestic buyers unable to afford homes.

The issue has sparked much debate in the country, with some calling for inquiries into the matter while others have proposed restrictions upon overseas purchases.

Now an inquiry is happening, though, one senior banker has told the House of Representatives’ Standing Committee on Economics that overseas investors have had little impact on the market at all, reports The Australian.

“The information available suggests that foreign residential purchases have probably not had a large direct effect on the price of housing that is typically purchased by first home buyers,” Reserve Bank of Australia assistant governor Christopher Kent said.

Indeed, overseas buyers are only permitted to pick up new-build property or off-plan units rather than the existing homes favoured by first-time buyers, which Kent said has helped to keep the sectors separate, with only a "marginal impact" potentially evident in certain areas.

If anything, Kent added, international buyers should be welcomed.

"Some recent housing purchases have also been associated with the increase in the number of families, particularly from Asia, that want to educate their children in Australia," he continued.

"Foreign residential demand in Australia is linked to the rise in income and wealth globally, but particularly in Asia, which is adding to business opportunities as our economy becomes more integrated with others in the region. This is welcome and to be expected."

The rising property prices are, he argued, the result of a shortfall in supply, as the market struggles to catch up with demand. Investment from abroad would also help to fuel construction, he concluded.