The number of foreign buyers has reached has reached record levels in Victoria, where they accounted for 32.5 % of all new property sales in the fourth quarter of 2014.

While foreign buyers were less prevalent in new housing markets nationally in the fourth quarter, accounting for 14.8 % of demand compared with 16.8 %  in the third, one in three new homes in Victoria was purchased by a foreigner, according to NAB’s residential property survey for the fourth quarter of 2014.

Nationwide, 53 % of foreign purchases were apartments, 31 % of houses and 16 % were for re-development.

In Victoria, apartments made up just 44 % of all purchases. Foreigners bought more houses in Victoria (38 %) than in any other state, the survey found.

The bulk of foreign buyers bought properties between $500,000 and $1 million, with 29 % purchasing properties under $500,000.

Approximately 5 % of all sales were for premium properties over $5 million.

NAB Economics expects average city house prices to cool to around 4 % over the year to end 2015 and 2 % over the year to end 2016.

“Our assessment of the market remains that house price growth will continue to moderate because of rising unemployment, sluggish household income growth, affordability concerns, cost of living pressures and high levels of household debt,” the report said.

“We are also forecasting two further interest rate cuts of 25 basis points in March and August2015, bringing the official cash rate down to 2 per cent, which should support house prices a little more than previously expected”.

NAB expects Brisbane (5.7 %) and Sydney (4.1%) to lead the market for capital growth to end 2015, followed by Melbourne(2.7%), Adelaide (2.1%) and Perth (1.8%)

John can be contacted on 0749722081 or 0410433919. or email him at jwhitten@ihl.net.au or net www.ihl.net.au. John Whitten is a credit representative (CRN 399796) of BLASSA Pty Ltd (Australian Credit Licence No 391237).