Morning Briefing: Houses too pricey? Data show Aussies shouldn’t blame foreigners

Just how much foreign money is contributing to rising property prices is a staple of dinner party conversations around the globe... Nationwide drop in first home buyer loans: HIA...

Morning Briefing: Houses too pricey? Data show Aussies shouldn’t blame foreigners
Houses too pricey? Data show Aussies shouldn’t blame foreigners
(Bloomberg) -- Just how much foreign money is contributing to rising property prices is a staple of dinner party conversations around the globe. Australians now have a near-official answer, and it’s less than most would think.

The Australian Treasury estimates that foreign demand for real estate increased prices in Sydney and Melbourne by no more than A$122 ($90) a quarter from July 2010 and March 2015, and possibly as little as A$80. That compares to an average increase in overall prices of about A$12,800 a quarter, according to a report released Friday by the Canberra-based Treasury.

“Only a small proportion of the strong property price growth over the study period can be attributed to foreign demand,” the working paper concluded.

Australian home prices have increased by more than 50 percent since 2008 in the nation’s largest cities. In recent years that’s been spurred by unprecedented monetary easing from the central bank and a growing population, although increasing amounts of Chinese money have entered the market at the same time. Australia approved A$24 billion of Chinese real estate investments in the year ended June 2015.

Nationwide drop in first home buyer loans: HIA
The Housing Industry Association released its latest Housing Scorecard report last week, which ranks each of the eight states and territories based on the performance of their housing markets.

“The large states dominate the top rankings in the latest HIA Housing Scorecard, with NSW extending its lead in first place thanks to a remarkable performance on the detached house side,” explained HIA senior economist, Shane Garrett

“Probably the starkest result from today’s HIA Housing Scorecard concerns the volume of First Home Buyer loans, which have fallen well below their long-term average in each state and territory. The obstacles to housing affordability for first home buyers merit a national-led response,” he said.

“In second place on the HIA Housing Scorecard, Victoria was particularly strong for home renovations activity but also did well on the detached housing side. 
“In this edition of the HIA Housing Scorecard, Queensland grabbed the bronze medal with a solid showing on the multi-unit side.

“Outside of the Top Three, South Australia and the ACT occupied the mid-table positions. Western Australia, the Northern Territory and Tasmania are all neck-and-neck with declining market momentum on the HIA Housing Scorecard,” Garrett said. 

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