Melbourne’s new apartment market remains popular with foreign investors. Source: News Corp Australia

The NAB Residential Property Survey shows foreign buyer activity surged to a new high in Victoria despite falling away in other states in the last three months of 2014.

The survey found more new homes in Victoria were sold to foreigners than any other segment of the market.

Overseas investors bought 32.5 per cent of new homes in the three months to December, compared to the 24.2 per cent bought by local owner occupiers. Local investors had a slightly smaller share and first-home buyers were well behind with about 18 per cent of new home sales.

The survey, of about 300 property market and development insiders, found foreign buyers started 2014 behind the local competition — sitting at about 10 per cent in the March quarter — but climbed their way to the top.

NAB Group chief economist Alan Oster said nationally foreign buyers fell from 16.8 per cent to 14.8 per cent in the December quarter.

Another difference between Victoria and the rest of the nation was the popularity of new houses with foreign investors.

“Apartments made up just 44 per cent of all purchases in Victoria compared to between 54-57 per cent in other states, with foreign buyers purchasing more houses in Victoria (38 per cent) than any other state,” he said.

The survey found 40 per cent of foreign purchases were for new properties valued from $500,000 to $1 million, while 29 per cent were for properties under $500,000 and about 5 per cent involved properties of more than $5 million.

Foreign investors also increased their share of established home sales in Victoria, claiming 12.8 per cent, but they remained the smallest segment in this market.

First-home buyers also made ground in the December quarter, their share of established home sales jumping from about 15 per cent to 20 per cent.

The survey also found house price growth in Victoria was expected to slow to 2.2 per cent in the next one to two years.