The research also found that two thirds of property purchases were cash settled, reducing Ms Wright's concerns about settlement risk while most borrowers that took out a mortgage did so with a Chinese bank, suggesting Australian bank lending restrictions were less impactful.

New horizons

Ms Wright said that Chinese property investors were now looking to Bangkok, Thailand, as a new market.

"I am not sure if that's a function of the One Belt One Road initiative and people are seeing the infrastructure spend and the co-operation, but also the price point is pretty attractive."

While Chinese interest in Australian property has had an impact, the state of China's property market is arguably more important for Australia's economy given it influences demand for commodity exports.

The Chinese government's "shanty town monetisation" program has proved successful in significantly reducing the overhang of properties, or so-called ghost towns. The government effectively funded the relocation of displaced individuals to vacant properties rather than constructing government housing, clearing the housing stock.

The inventory reduction, most evident in second and third-tier cities, helped to reboot the property market to the point where authorities intervened to tighten conditions.

China slow-down


Even if there is more comfort that Chinese authorities can manage a property slow-down, the sector is critically important to the overall economy, accounting for a quarter of "added value" in the economy while 50 per cent of bank credit is tied to the health of the sector

A constant theme at the Shanghai conference was the step up in efforts by Chinese authorities to reduce private sector debt levels and put the economy on a sounder footing without severely impacting growth, or precipitating a financial crisis.

"A Minksy moment will not come in China. The debt problem is not going to result in a sudden collapse," said UBS head of Asian economic research Wang Tao.

"We have high levels of debt but it's not foreign debt. The Chinese banks have a lot of deposits and the governments will strongly convince them to support the real economy [if they have to]," she said.

Dr Wang said data that showed that China's foreign exchange reserves had actually increased was a "pleasant surprise" particularly in the context of fears last year that sustained outflows would deplete reserves and weigh on the currency.

She is forecasting slower economic growth of 6.4 per cent in 2018 and 6.3 per cent in 2019 compared with the 6.8 per cent achieved in 2017.