Reserve Bank Assistant Governor Christopher Kent has poured cold water on suggestions that foreign investment in the local property market has priced out first-home buyers.
Mr Kent told the told the House of Representatives’ Economics Committee inquiry into foreign investment in residential real estate that the information available suggest "foreign residential purchases have probably not had a large direct effect on the price of housing that is typically purchased by first home buyers".
Mr Kent added that while foreign buyers tend to concentrate on inner city apartments, first home buyers generally purchase homes in the outer suburbs of the main cities.
His comments echo a report in the RBA's quarterly bulletin that said the degree of competition between local first home buyers and foreign buyers is likely fairly small.
In an earlier submission, the Productivity Commission called for a holistic review of nation’s foreign investment rules saying Australia’s investment laws had made the country a "less attractive destination for foreign direct investment than would otherwise be the case."
Mr Kent also called for called for more timely and detailed data on the level of foreign investment from the Foreign Investment Review Board (FIRB).
"While incomplete, the FIRB data and the information received through our liaison with developers suggest that most foreign residential purchases are for new, higher-density, inner-city properties as well as properties close to universities," he said.
"Furthermore, the properties they purchase tend to be valued well above the average national sales price. In contrast, most purchases by first home buyers have been for established homes that are priced well below the national average."