Foreign buyers are flocking to Australian real estate market and fueling demand in Sydney's central business district, North Shore and Eastern Suburbs said the Real Estate Buyers Association of Australia.

"We see a lot of interest from Singapore, Hong Kong, Tokyo and the UK. They know the market is depressed and they are making huge capital gains and are reinvesting into the market," said Byron Rose, president of the Real Estate Buyers Association of Australia.

Australia is seen as a secure market overall. Figures from the Foreign Investment Review Board show that overseas buyers snapped up US$23.4 billion worth of real estate in the country that includes 3,639 new and existing homes plus 988 parcels of land during the peak of the Global Financial Crisis last year.

Lending for local buyers are harder to secure due to rising interest rates so real estate companies are now promoting the Australian real estate market abroad. Recently, major industry consultancy firm CB Richard Ellis held a real estate exhibiiton in Hong Kong to entice foreign buyers on opportunities in the country.

In addition, there is a an oversupply of properties available in the market. Australian Property Monitors says that auction clearance rates in Sydney and Melbourne were 51.7 percent and 54.8 percent respectively with many withdrawing properties before the auction.

David Airey, president of the Real Estate Institute of Australia told The Australian: "Listing numbers for agents are backing up. The stockpile is huge and it's growing. In Perth, for example, there are 17,500 properties on the market and that is around 50 percent above what would be regarded as normal supply."