Federal Parliament's House Economics Committee is examining the laws governing foreign investment following community concern over a rise in Chinese property investment.
According to a report in The Sunday Telegraph, Coalition MPs have raised concerns that young families are being priced out of the home buying market.
The parliamentary inquiry will be chaired by Victorian MP Kelly O'Dwyer with public hearings held in "real-estate hot spots", the report added.
Speaking to ABC Radio this morning, Ms O'Dwyer said the committee would look into the current foreign investment framework to assess how it accords with real estate and whether it's driving up prices.
"The great Australian dream is to own your own home and we know that's pretty difficult even with two incomes and lots of years of savings and a large mortgage so we want to make sure we’re not making it even more difficult" Ms O'Dwyer added.
Opposition leader Bill Shorten told a press briefing this morning that Labor will be "supportive and cooperative" with the inquiry but added that foreign investment is not the only issue.
"We’ve got to make sure that ordinary Australians can get their deposit together, we’ve got to make sure that the land is released, that they have adequate infrastructure," he said.
A report released earlier this month by Credit Suisse estimated that Chinese buyers are expected to purchase $44 billion worth of Australian residential property over the next seven years.
Up to 12 per cent of all new housing purchases are by wealthy Chinese investors.
The investment bank estimates that 12 per cent of all new housing purchases and up to 18 per cent in Sydney and 14 per cent in Melbourne are by Chinese buyers.
According to the report, Chinese buyers comprise an estimated $5bn worth of property purchases in Australia per annum.
The findings follow Foreign Investment Review Board (FIRB) data that shows Chinese investors were the largest source of foreign investment in Australian property in 2012-13 (China ramps up Australian property purchases 1 March 2014).
The number of Chinese who are able to afford an apartment in Sydney is expected to rise by 30 per cent by 2020.
Chinese buyers bought $24bn of housing over the last seven years.