Indices don't suggest foreign investors pushing up house prices: Master Builders

The discussion of foreign buyers in the light of a lack of data around their purchasing has seen Master Builders chief executive Wilhelm Harnisch warn that if the RBA moves it will be to the disadvantage of local buyers.

Speaking to 2GB yesterday, Harnisch said that it’s crucial to have the data specifically relating to foreign buyers, however the current information doesn’t seem to support the hypotheses that it’s a problem.

“Certainly when you look at some of the other price data, which is obviously also an indicator the RBA uses...Master Builders is not too unduly concerned about the impact of foreign investors at this point in time,” Harnisch told 2GB’s Ross Greenwood.

“We need to get some very reliable and robust data, so that’s point one. But secondly, in part there’s an unfortunate hype about foreign investors at this point in time," he said.

Pointing to the various house price indices, he said that any concerns about a house price blow out are starting to ameliorate, "and therefore the sorts of fears about a ‘foreign flood of investors pushing up house prices’ are certainly not represented in those sort of indices that are coming out of late".

He then warned that any response from the RBA that is on the back of market discussion as opposed to data, would be a worry.

“We’d be very concerned that the RBA, when it does act, doesn’t act particularly to any sort of populist reaction in terms of what the market maybe thinks is happening, and therefore raising interest rates would then severely disadvantage our local domestic buyers.”