Apartment prices are also weakening, he said.

"Now, if anything, it's going down a bit," Mr Triguboff said. "It went up in the beginning of the year. Now it's gone down."

Apartment values weakened across the east coast last month, figures from CoreLogic showed. Sydney and Melbourne apartment prices fell 1.2 and 0.9 per cent respectively, while Brisbane suffered the biggest decline, a 1.9 per cent fall. Meriton develops in NSW and Queensland but not in Victoria.

The increasing reluctance of Australian banks to lend to foreign buyers was part of the problem, but the greater reason the Meriton boss had started lending directly to his customers was the Chinese government's moves to restrict buyers from taking money out of the country, he said.

"The Chinese government is making it hard for them. That is the biggest problem."

It was proving a problem for Chinese customers, who regarded Australian property investment as a way of securing wealth outside of China, and had never previously encountered problems with sending money out, he said.

"What happened before is that the Chinese buyer knew he could get money out of China," Mr Triguboff said.

"So he never borrowed here. And then it became harder over there. So he said 'I will borrow here'. And we decided 'We can't give it [credit] to him because he jacks up the prices'. So he's caught. I hope that we will lend money to them because they are very good borrowers. You show me a man that buys a unit – you don't talk about a man that buys for $400 million – I mean a man who buys for half a million. He will pay, no question. So the banks should be allowed to lend to them.

"Then they said 'We don't understand their financials'. But that's bullshit – the fact is, they all pay. Show me one who didn't pay. We should allow them."