"The take-home point is that domestic investment is a much bigger pool of money, and those who are culpable for the high housing prices are the local mums and dads."

Strong double-digit growth in house prices, particularly Sydney and Melbourne, has placed the federal government on high alert.

Treasurer Joe Hockey introduced new penalties for investors who breach foreign investment rules and also ordered the divestment of properties, including Chinese billionaire Xu Jiayin's $39 million Point Piper home Villa Del Mare, which resulted in a high level of anxiety among Chinese investors.

Dr Rogers said the misalignment of state and federal goals for foreign investments results in finger-pointing at Asian investors.

"You have the state talking about global cities and the benefits of multicultural abilities ... and foreign students, for example, are a very important part of that foreign story," he said.

"Coming down hard on foreign students in the parliamentary inquiry goes against the idea of global cities. It all comes down to the fear of the Asian invasion."

Dr Rogers also said the blame on Chinese investors only serves to highlight a bigger problem: Australians cannot afford housing because their wages have not kept up with property prices.

"Just because there is more housing in the market doesn't meant first home buyers can buy them," Dr Rogers said.

"The question is not just how much supply but what type of housing."

The Real Estate Institute of Australia said there has been an improvement in overall housing affordability over the June quarter but NSW recorded a decline in affordability.

Mr Hendrischke and Dr Rogers spoke at the University of Sydney's Festival of Urbanism.