Offshore cash not driving housing: Hockey

Treasurer Joe Hockey has played down criticism of planned new rules aimed at limiting foreign investment in residential property.

The Property Council claims higher fees on foreign buyers will dampen demand and adversely impact housing construction, especially apartments.

Mr Hockey says residential construction rose 20 per cent in NSW in the past year and there were many factors, including lower interest rates, for that increase.

"I don't accept ... that a lot of it is foreign investment money," he told ABC Radio on Thursday.