"That means they will have to go through the bank which is becoming more difficult."

She says Chinese buyers purchasing properties over $5 million would often have offshore business interests, which had allowed them to get money out of the country.

In China, individuals are restricted to moving the equivalent of US$50,000 out of the country each year. There were previously many ways to get around these capital controls, as banks and the government turned a blind eye to money going offshore.

But in recent weeks as China's currency, the yuan, has come under increasing pressure from capital outflows and those speculating it is set to fall further, the banks have tightened up on existing regulations.

The Australian Financial Review has been told state-owned banks are delaying or even blocking money going overseas. The crackdown has seen more stringent checks on documents for both companies and individuals.

"We are now refusing all foreign currency transfers where the documents are not fully complete .... previously the requirements were not so strict," said a bank executive in Shanghai who asked not to be named.

The tighter rules are in response to a record US$108 billion fall in China's foreign-currency reserves in December to the lowest level in three years, as capital left the country and the central bank was forced to defend the yuan.

According to the Washington-based Institute of International Finance, China saw $US676 billion in capital leave the country last year, as outflows surged in the second half of last year.


The Chinese currency has fallen 3 per cent since August last year, when the government begun to guide it lower.

There are fears Beijing's crackdown on foreign exchange transactions will spill over into the Australian property market, which has seen strong price gains over the last five years as Chinse buyers moved aggressively into the market.

An Australian real estate agent based in Shanghai, Scott Kirchner, said the tightening of restrictions could "cause problems for Australian developers as clients may not be able to get their money out of China."

"I'm advising people not to sign a contract unless they already have their money outside China," said Mr Kirchner, a director of BellerChina.