It seems that foreign investment in the Australian housing market is even more considerable than originally thought. According to new data released as part of the National Australia Bank’s Residential Property Survey, overseas buyers account for almost seventeen precent of total demand for new properties. The heightened interest has set our market on an upward trajectory, with significant investment in high end apartments and luxury housing.

The NAB suggested that the figure would increase over the net year, with thousands of foreign buyers investing heavily in Australian land. In the state of Victoria, foreign demand for new homes accounted for almost twenty five percent of the total housing demand. In the booming city, his would account for one in four new homes, a figure which relays the deep level of foreign investment.

But both the ABS and senior economists have issued warnings that these statistics will not affect the fates of future home buyers. According to the Bureau of Statistics, the number of first home buyers may not be an entirely accurate assessment of the marketplace (the figure currently used is based on the number of people who receive a first home owner’s grant), leading others to speculate that the heightened investment is not affecting ordinary home buyers.

Speaking to the Sydney Morning Herald, NAB chief economist Alan Oster said there would be no increased sense of competition in the housing marketplace. “They’re not buying cheap stuff,” he speculated. In other words, the average Australian home owner won’t be affected.

Despite the pundits’ best assessment, the market doesn’t seem to have responded in like kind. Ever-increasing property prices are crippling the citizens of Australia’s developed cities, limiting financial options and social mobility. In the city of Sydney, the Australian Property Institute’s bi-annual Property Directions Survey found that a whopping ninety six percent of industry analysts concurred that investment from foreign entities was a ‘significant-to-very-significant’ source of intensified demand and sky-rocketing prices.

Over the next few weeks, we’re likely to hear more about this hot-button issue; a parliamentary inquiry into foreign ownership is set to meet for the final time this November. Once those recommendations are officially handed down, the mercurial nature of foreign investment will perhaps be better understood…

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