Australia approved a record A$24.9 billion (HK$175.23 billion) of home purchases by foreign buyers in the nine months to March, a 93 per cent jump from the same period a year earlier, UBS said. Overseas investment in housing in Australia was now 13 per cent of total turnover, compared with a trend of 8 per cent, UBS economists Scott Haslem and George Tharenou wrote in a report. About 78 per cent of purchases were of new properties. The parliament is conducting an inquiry into foreign buying of real estate amid concerns that overseas demand is pushing up prices and making housing unaffordable for domestic buyers. Housing prices climbed 10.7 per cent across Australia's eight state and territory capitals to a median A$545,000 in the 12 months to May, according to the RP Data-Rismark home value index, while interest rates are now at a record low 2.5 per cent. "Foreign demand rose despite a relatively expensive valuation and Australian dollar," Haslem and Tharenou wrote in the report. "We see a likely ongoing long-term uptrend of foreign investment in housing," which supported the bank's forecast of a 7 per cent increase in prices this year, they said. Rising home prices posed some medium-term risks to the nation's economy, with the housing market facing a possible "correction", Steven Hess, a senior vice-president for sovereign risk at Moody's Investors Service, said in a statement last week. While approvals for foreigners to buy housing in Australia were rising, the nation's climbing prices were largely a result of domestic demand and a lag in supply, Christopher Kent, an assistant governor of the Reserve Bank of Australia, said at a hearing held as part of the housing inquiry last week. Australia tightened rules on foreign investment in real estate in 2010, requiring offshore buyers to purchase only new properties, and introduced penalties to enforce the changes. The government has also said temporary residents must obtain approval from the Foreign Investment Review Board to buy homes, and must sell when leaving the country.