The Effect of Foreign Demand on Residential Property Prices: Evidence from Australia | Zendy

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The Effect of Foreign Demand on Residential Property Prices: Evidence from Australia

Author(s) -

Wokker Chris,

Swieringa John

Publication year - 2020

Publication title -

australian economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.308

H-Index - 29

eISSN - 1467-8462

pISSN - 0004-9018

DOI - 10.1111/1467-8462.12346

Subject(s) - residential property , real estate , economics , investment (military) , house price , foreign direct investment , regression analysis , residential real estate , monetary economics , demographic economics , agricultural economics , macroeconomics , economic geography , finance , politics , mathematics , political science , law , statistics

This study estimates the impact of foreign demand for Australian residential real estate on property prices. Using postcode‐level administrative data and fixed‐effects regression techniques we find a positive relationship between foreign investment approvals and price growth. Our analysis suggests that, on average, foreign investment contributed between $80 and $122 to quarterly price growth in Sydney and Melbourne between July 2010 and March 2015. This is a small proportion of the increase in property prices over the period.

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