Foreign buyers were less active in the residential property market in the June quarter following a strong rise in the first quarter of the year.
Foreign buyers’ share of total demand fell to 7.2 per cent from a high of 9.5 per cent in Q1, according to property professionals’ surveyed by NAB.
Foreign buyer demand fell in all states, but was strongest in Victoria (9.1 per cent) and NSW (8.9 per cent).
Non-resident investment lending has been a contentious issue and one currently under review by the House of Representatives Economics Committee.
“I’m certainly of the view that there is so much employment dependent upon the construction industry and the knock-on trades that it supports that non-resident lending can only continue to be a good thing for the building and construction industry,” Mortgage Choice chief executive Michael Russell told Mortgage Business.
“I know a lot of people think that it creates some sort of inflationary effect on property prices to the detriment of first home owners,” Mr Russell said. “It’s not a significant number at all,” he said.
First home buyers were more active in the established property market in Q2, representing 18.5 per cent of total demand compared to 16.8 per cent in Q1, according to NAB’s residential property survey.
First home buyers were most prevalent in WA (23 per cent) and VIC (22 per cent).
Local investors continue to play a key role in the market and represent 25 per cent of all buyers, with investment activity highest in QLD (29 per cent) and NSW (28 per cent), while lagging considerably in WA (18 per cent).
The survey found housing affordability has replaced credit availability as the key concern for buyers of new property.
Employment security is still the biggest impediment in the established market in most states, particularly in South Australia and the Northern Territory, according to NAB’s residential property survey for the June quarter.
NSW is the exception to the rule, with house prices and lack of stock the biggest obstacles for established property buyers.
National house price growth eased in the June quarter to 0.9 per cent, compared to 1.7 per cent in the first quarter of the year.
House price growth over the next year is tipped to be fastest in Queensland at 2.3 per cent and Victoria at 2.1 per cent, while WA will see the slowest house price growth of 0.2 per cent.