AUSTRALIA: Could banning foreigners buying property end sky-high prices?

PHOTO: Booming property prices have led Canada to ban foreigners entering the market. (Source: Getty)

Canada and Australia have a shared problem – property prices are red hot.

To fix the problem, Canadian Prime Minister Justin Trudeau announced a ban on foreign investors buying homes for two years.

In Canada, property prices grew more than 20 per cent last year. In Australia, property prices soared more than 22 per cent.

While the move in Canada has been met with differing opinions, could Australia soon follow suit?

Here’s what we know about the landscape here.

Foreign investment in the Aussie property market

Australians have expressed concerns about Chinese investment in the Australian residential property market specifically, a UTS study found.

The study found a clear majority of Australians (82 per cent) felt foreign buyers from China drove up Australian housing prices.

Around seven in 10 Australians (69 per cent) said Chinese investors in Australian real estate had made it difficult for first home buyers in Australia to enter the market.

The same number of those surveyed also felt Chinese investors had negatively affected the rental market for residential real estate in Australia.

The majority of Australians (78 per cent) believed the Government should restrict the amount of Chinese investment in residential real estate.

However, the most recent NAB residential property survey revealed foreign buyers only accounted for 4.6 per cent of the Aussie property market.

“Foreign buyers in Australian housing markets remain subdued and well below average,” the survey said.

We reckon it is the BEST property news update in NZ!

So, what is pushing up property prices?

Property professionals identified price levels and a lack of stock as the biggest impediments for buyers of existing property – nationally and in all states – according to the NAB survey.

Essentially, Australia just doesn’t have enough homes to sell to keep up with our rising population and demand.

On top of that, concerns over rising rates were impacting buyers of existing housing more than at any time over the past three years, NAB reported.