The flow of Chinese cash risks inflating Sydney and Melbourne house prices that are already beyond the reach of many Australians. Further price gains would be a headache for central bank Governor Glenn Stevens because they make it harder for him to cut interest rates to stimulate a slowing economy. China's equity rout has also improved business for Sydney-based GHK Real Estate, which is selling apartments to overseas investors at Parramatta, a 45-minute drive west of Sydney. Safer bet GHK director Grace Yeung, who returned Monday from a property seminar in Hong Kong, said potential buyers there considered Australian homes a safer bet than mainland stocks.

"Many would rather put their money into property now," Yeung said in a telephone interview. "I see a lot of interest from the Chinese people compared with before" stocks crashed. In the past month, China's record-breaking equity boom turned into the worst rout in more than two decades. To stop the slide, authorities took steps including suspending initial public offerings and banning the biggest shareholders from selling up. The measures helped spark a three-day rally starting on July 9. Nigel Stapledon, head of real estate research at the University of New South Wales Business School and former chief economist at Westpac Banking Corp., warned against viewing Australian property as a safe haven. "Past returns are where someone else made money," he said. "You don't want to be the last man in." The stock market rout has caused some investors to reconsider their options, according to property agent Black Diamondz. Director Monika Tu, who helps Chinese buyers find homes in Sydney, said one client doubled his budget to A$15 million after Chinese shares soared. He cut it to A$7 million after the crash.

Home prices in Sydney have jumped 43 per cent since May 2012, while nationwide values have risen 27 percent, according to CoreLogic Inc. 'Crazy' market Australia's most-senior economic bureaucrat said last month Sydney is in the midst of a price bubble, while Mr Stevens said parts of the city's property market have gone "crazy." All the same, Chinese are on course to take out 20 percent of new homes in Australia in 2020, up from 15 percent now, Credit Suisse Group AG said in May. Australia drew more than 25 percent of the Chinese capital invested in commercial property worldwide in the first three months of 2015, according to CBRE. The sliding Australian currency is working in their favor, neutralizing some of the property price gains. The Aussie has lost 29 percent against the yuan in the past three years and 27 percent versus the Hong Kong dollar.

The currency "helps in a huge way," said John Fitzgerald, Sydney-based operations manager for Billbergia Pty, which sells about 20 percent of its apartments to offshore buyers. Chinese who have settled in Australia also benefit from the weaker dollar, he said. "Even if it's local Chinese people who are buying the apartment, you can be sure they're being helped out by parents overseas," Mr Fitzgerald said.