Housing market professionals are still upbeat despite a drop in interest from foreign buyers.
The National Australia Bank’s quarterly residential property survey showed sentiment in the industry picked up in the first quarter of 2016 after falling for three quarters in a row.
But the market is not uniform across the country, the survey showed.
“The latest results continue to paint a very mixed picture across the country, with positive sentiment in the eastern seaboard states offsetting negative results in all other states,” NAB Group Chief Economist Alan Oster said.
The proportion of sales of both new and existing homes gong to foreign buyers has been falling since the tighter controls were established in late 2015, Mr Oster said.
Their share of new properties sold peaked at 16.8 per cent in the third quarter of 2014 but fell to a two-and-a-half-year low of 11.8 per cent in the latest survey.
The survey also highlighted a shift of emphasis by foreign investors, with NSW and Victoria declining in popularity at the expense of Queensland.
Foreign buyers of new homes accounted for one in three purchases in Victoria in late 2014 and one in five in NSW in early 2015, but that measure has now fallen to about one in 10 for both the big two states.
At the same time, the share going to foreigners in Queensland has risen from one in 10 to over one in five.
House prices are expected to rise over the coming two years in most states, with the exception of NSW where only a marginal fall from very a high level is tipped by the professionals.
Mr Oster said it was not clear whether the generally upbeat mood would be sustained.
“At this point in the housing cycle, it is not clear whether the gains over first quarter of 2016 are pointing to an ongoing trend, or if it is simply a flash in the pan before the market peak, perhaps triggered by external factors,” he said.