Foreigners bought between 35,000 and 60,000 residential dwellings in Australia in 2015-16, making up only between 7% and 13% of total housing turnover for the year, according to Australia’s ANZ Bank on the basis of Australia’s Foreign Investment Review Board (FIRB) data.

The data has been released at a time when concerns are being raised over the possibility of a sharp increase in overseas investment in Australia's property markets following the ban on foreign buyers in New Zealand.

"The estimated ownership (of overseas buyers in Australia) is significant… but not large enough to raise concerns about a foreign exodus from the Australian housing market," said senior economist at ANZ Daniel Gradwell.

The bank found that the share of overseas ownership is significant for newly newly-constructed dwellings at between 15% and 25%, indicating that foreign demand has been an important contributor to Australia’s recent construction boom.

“Using Foreign Investment Review Board data we estimate foreigners own between 2.5% and 4% of Australia’s housing stock, plus anything purchased before 1995-96 when the data became available. The range reflects uncertainty about the extent to which foreign-buyer approvals convert to actual purchases,” Gardwell was quoted as saying.

The estimated ownership is significant - especially considering the current rate of growth is much stronger than in the past - but not large enough to raise concerns about a foreign exodus from the Australian housing market, he added.  

Overseas buyers are required to obtain FIRB approval to buy a new dwelling or vacant residential land. FIRB can also approve the purchase of an existing dwelling also if it believes that it would contribute to an increase in the housing stock. 

“FIRB data tell us in 2015-16, 40,100 property purchases by foreign buyers were approved, valued at $A72.4 billion (US$54.35 billion),” Gradwell said. 

He added, “The impact of foreign demand on prices is less clear. The purchase of 7% to 13% of total sales each year is not as significant as the share of new construction. The impact on overall prices is likely to be less.”