The number of home-loan approvals rose 0.9% in November 2016 from October 2016, the Australian Bureau of Statistics says.

The value of loans for investment housing increased by 4.9% from October, the ABS said. Cameron Kusher, head of research at CoreLogic, says there was a clear trend emerging of investors coming back into the property market, which he expects to continue in 2017.

Kusher says a bank crackdown on lending to property investors in 2015 resulted in sharp falls in new lending to these customers, but "once they were eased, there was still a lot of investor demand in the market place."

A Treasury working paper based on five years of research found foreign demand accounts for only a small proportion of the increase in property prices in recent years. The low number of building approvals and completions in the late 2000s has also impacted price growth.

The nation's property values have increased by an average 42% over the past 4½ years, according to one source, dominated by a 67% rise in Sydney and 46% in Melbourne.

Nearly 70% of foreign investment approval applications for housing were from Chinese citizens, up from 50% six years ago.

"It is difficult to directly attribute price growth in Sydney to foreign investors alone," the Treasury paper said.

State governments have reacted to the growing foreign buyers' demand by raising stamp duty on foreign transactions to slow down the activity.