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Australia’s housing market needs more foreign investment, not less, according to LJ Hooker.
The real estate giant also said that locals – not foreigners – are the “overwhelming driver of price growth” because they account for more than 90 per cent of property purchases.
The federal Inquiry into Foreign Investment in Residential Real Estate has attracted mixed views about whether foreign investment is a threat to the housing market or an opportunity.
LJ Hooker’s national research manager, Matthew Tiller, said foreign investment should be encouraged because real estate plays a strong role in determining Australia’s economic health.
“Regulations that drive international investment towards new projects, particularly off-the-plan purchases, are helping create jobs and driving growth in the construction industry,” he said.
“With international investors accounting for approximately eight per cent of residential transactions, the market can sustain further activity in this important sector.”
Mr Tiller added that foreign investment was “relieving under-supplied housing markets” rather than contributing to a supply shortage.
LJ Hooker’s head of residential, Christopher Mourd, said overseas buyers almost exclusively buy off-the-plan properties due to foreign investment regulations. That's something people needed to remember when they spotted ‘foreign’ faces at auctions, he said.
“Australia’s rich multiculturalism has created confusion around the issue of foreign buyers, particularly at auctions for existing properties,” Mr Mourd said.
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