Offshore buyers cannot be blamed for a lack of affordable housing, RBA assistant governor Christopher Kent has said.

Rather, arduous planning processes, a lack of land and residents unwilling to accept higher-density housing in their neighbourhoods contribute to a housing undersupply, forcing up prices.

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Low interest rates have fuelled a local buy up, which has also raised prices.

Speaking to the federal government’s inquiry into foreign property investment on Friday, Kent said the 10 per cent rise in house prices was largely home-grown.