The share of foreign buyers in the Australian residential property market is declining, according to The National Australia Bank's Residential Property Survey for the first quarter of 2016.

Concerns about inflated prices, fraud, and money laundering have resulted in a raft of measures aimed at constraining foreign purchases of local property.

The banks have tightened lending to foreigners, the FIRB has cracked down on illegal purchases, and both state and federal governments are beginning to impose new taxes on foreign buyers.

The latest numbers from NAB's Residential Property Survey show the policies are beginning to take effect. 

The percentage of foreign buyers in the Australian property market fell to a two-and-a-half-year low for both new and established homes during the first quarter of 2016.

Foreign buyers accounted for 11.8% of new property sales during the March quarter, compared with 14.4% the previous quarter. And in established property markets, foreigners accounted for just 7.2% of all sales, a decline from 8.6% the previous quarter.

Foreign buyers were less prominent in all capital cities, except Brisbane, which saw foreign buyers account for 21.9% of demand for new property, compared with 20.9% the previous quarter. The share of foreign buyers in Queensland's new property market has now risen for three consecutive quarters.

The authors of the NAB Residential Property Survey said of Queensland, “The market share of foreign buyers in new property markets has grown for three consecutive quarters and may suggest that they are being attracted by lower average prices there.”

The decline in demand from foreigners was the sharpest in Victoria, where the share of foreigners in the new property market fell to 10.7%, well down from the survey high of 32.5% experienced in the last quarter of 2014.

See also:

Withholding tax for foreigners adds to red tape.

Property council urges NSW not to increase stamp duty, land tax for foreigners.

Last of the big four closes doors on foreigners.