Demand for properties from offshore Chinese buyers is expected to hit record highs in 2016, new data shows. But there could be some cracks ahead for this surging segment of the market.

In 2015, Chinese investment in Australian real estate doubled over the year, Foreign Investment Review Board data found. Nearly all 150 agencies surveyed by Investorist for its China 2016 International Property Outlook believed this would be surpassed in 2016.

Just seven of 150 agencies surveyed considered foreign countries’ policy changes, such as Australia’s recent Foreign Investment Review Board restrictions, would affect sales.

The demand, however, could be affected by the ability of Chinese buyers to expatriate funds from China, Investorist chief executive Jon Ellis said.

But experience with Chinese clients “has shown that they are very resourceful and they will find a way to effectively navigate the changes to foreign capital allowances,” he said.

In 2015, Chinese buyers made 87.1 per cent more purchasing enquiries to property sellers than in 2014, China-based real estate website Juwai’s Chinese Buyer Report April 2016 shows.

Inquiry was strongest in Waterloo, Bankstown, Sydney CBD, Turramurra and Ultimo.

“When offshore investors purchase off the plan, they give developers the security they need to start construction on the new buildings that will provide homes for Australians,” Juwai head of Australia Gavin Norris said.

But there are signs of growing pains. Commonwealth Bank, Australia’s largest mortgage lender, sent a note to brokers in mid-April stating it would no longer approve applications that cite self-employed foreign income. ANZ and NAB introduced similar policies.

When Westpac followed suit at the end of April, Mortgage One Australia mortgage consultant Michael Khoury said he immediately had calls from developers concerned about whether buyers would be able to get a mortgage on settlement day.

Developers who had sold apartments off the plan to offshore investors “must be worried” about the prospect of having to re-sell.

“Westpac were the last catering to this part of the market,” Mr Khoury said.

“With restrictions on bringing money in and lending restrictions [in Australia] a lot of these sales will fall over in the next 12 months.”

The slowing market and excess apartments due to a multi-year long construction boom, driven partly by the foreign investment market, also didn’t bode well for the future of these developments, he said.

However, Chinese property portal ACProperty director Esther Yong said the typical offshore Chinese buyer is “generally not [a] big risk taker”.

Most would have a substantial cash buffer to cover any problems with funding or would consider a smaller lender as an alternative, she said.

In the early months of 2016, Sydney-specific searches on the ACProperty site were up 87 per cent.

Mr Ellis agreed the willingness of banks to fund foreign investments was an important factor, but provided second and third tier banks did not follow Westpac’s decision, “demand should not be overly dampened [by] this factor either”.