2 it is worth emphasising that the purchase of a property by a foreign citizen or temporary resident may not contribute one for one to net housing demand in australia. for instance, there would be little effect on net demand if the property purchased is used to house foreign students who would otherwise have needed to rent during their stay here. similarly, net demand for housing would be little changed if an investment property is subsequently rented out. there is no comprehensive information on the magnitude of these types of transactions. so, while it seems likely that foreign residential purchases have added somewhat to net housing demand in australia, there is no way of knowing the exact extent to which this has been the case. whether an increase in net housing demand – be it from foreign or domestic sources – leads to higher housing prices depends on the responsiveness of supply. this subject has been see rba ( 2014 ), “ submission to the inquiry into foreign investment in residential real estate ”, 9 may. see gauder m, c houssard and d orsmond ( 2014 ), “ foreign investment in residential real estate ”, rba bulletin, june, pp 11 – 18. bis central bankers ’ speeches especially topical of late, with housing prices nationally rising by close to 10 per cent over the past year. the rise in prices has primarily reflected increased housing demand from australian residents and citizens, partly owing to low interest rates. the supply of housing is responsive to a rise in housing demand but, given the time needed to plan and build new housing, this typically occurs with some lag. however, several factors can accentuate this lag, including : • a shortage of well - located land and geographical constraints in our capital cities • the complexity of the planning and approval process, which adds to the time and costs of new housing developments • concerns of existing residents in regard to new development projects in their vicinity. these are not easy issues to address, although it is widely agreed that an appropriate balance needs to be struck if housing is to be provided at a reasonable cost. through the bank ’ s business liaison, we hear from housing market participants that impediments to increasing the supply of housing in some greenfield areas have eased in recent years. also, there has been interest in converting some of the older office buildings in central business districts into residential use, which may ease the shortage of land in highly sought after areas. however, our contacts also report that more could be done to increase the responsiveness of housing supply to demand.

what information can be conveyed to counterparties and other market participants. while it is clear ( or at least should be ) that disclosing the details of a client ’ s order book to a counterparty is not acceptable, market participants have noted that there is much less clarity around what level of aggregation, say, is necessary in order to convey market colour appropriately. 2 / 5 bis central bankers'speeches as a result, it appears some market participants are being very conservative in sharing information, which can have implications for the effective functioning of the market. this is notwithstanding the guidance provided in this area in the global preamble put out by the global fxcs, in march 2015. 5 the global code takes the material in the global preamble and fleshes it out a bit more, including with some examples of what is, and isn ’ t, appropriate communication, and why. similarly, there have been diverse opinions around what is appropriate behaviour in terms of order handling. there have been some very public instances of inappropriate behaviour around order handling that have come to light in recent years. the market is seeking greater guidance as to what principles should be followed, including the different standards that may apply depending on whether an intermediary is functioning as principal or agent. this is one area that was not adequately covered in the pre - existing codes that the various fxcs had endorsed for the fx market. it is an area where we have provided the sought - after guidance. but we are not writing a procedures manual for order handling. rather we are articulating principles that need to be taken into account. individual firms may then take these principles and reflect them in their own procedures manual. our aim in articulating these principles is to provide market participants with the framework in which to think about how they handle stop - loss orders. the emphasis here is very much on the word ‘ think ’. the global code will not provide the answers to all your questions, but it should help you ask the right questions. adherence to the code alongside drafting the code, we have also been devoting considerable time and effort to thinking about how to ensure widespread adoption of the code by market participants. clearly, that has been an issue with the various existing codes that have been in place in a number of markets over many years. it is evident that they were ignored on occasion, wilfully or otherwise. one of our central aims in drafting the code is for it to be principles - based rather than rulesbased.