CoreLogic RP Data senior research analyst Cameron Kusher says housing is looking expensive to many Australians, particularly in Sydney and Melbourne, but not so for foreign buyers.

He said the decline in the Australian dollar has made Australian housing even more attractive for offshore buyers, particularly for markets like China, Singapore and Hong Kong where investors may be looking not necessarily for short-term capital growth but to “park their money somewhere else”.

“Obviously there’s been a big improvement in affordability for buyers from those markets notwithstanding the fact that they’re borrowing at a lot lower costs as well,” Mr Kusher said.

Mr Kusher said capital city home values have risen by 26.8 per cent since reaching their most recent low point in May 2012, while the Australian dollar has fallen by 13.3 per cent in trade-weighted index terms over that period.

Investor activity, both domestic and foreign, in the housing sector has surged in recent years on the back of record low interest rates and strong gains in home values in certain areas.

“With the RBA stating that the Australian dollar remains overvalued, any further falls in the Aussie dollar are likely to result in even more attractive buying conditions for foreign buyers,” Mr Kusher said.

“We expect that particularly from China the level of investment will continue to grow exponentially year-on-year for quite a while.”

Foreign Investment Review Board figures put China as the largest foreign real estate investor in Australia, followed by the US.

Mr Kusher said recent government measures aimed at maintaining stability in China’s share market may even give Chinese investors even more resolve to invest offshore.

“We also think as different countries make different rules around foreign buyers, that might even drive more Chinese buyers to Australia.”