The same Malaysian interests also bought three development projects in downtown Melbourne, using the same Australian partners and advisers. Expected to go for $18 million, Dudley International House in Caulfield East, sold for $22.5 million. Australia has always relied on foreign capital, but never before has so much of it been sourced from places where corruption is so rife and law so weak. Some of it is coming from south-east Asia, where cooling markets make Australian returns look attractive. Most of it is coming from mainland China, where President Xi Jinping is waging war against corruption he says runs so deep that it threatens his regime. "In China, with the new austerity policies and an anti-corruption push, the floodgates have opened," says Andrew Leoncelli, former AFL football star, now managing director of CBRE Residential Projects Victoria, which dominates the local apartment market.

"All the main Chinese developers are now in Australia including the quasi-government enterprises." Who, exactly, are the new kingpins of Australian real estate? "They are people who earned money through favourable treatment under a particular regime and now have a window of opportunity to get that money out into a safe haven," says Leoncelli. Much of the flood of capital from Asia is pouring into developments in the Australian real estate market, in places where young people want to live. Leoncelli points to the forest of new high-rises in inner Melbourne, where foreign investment is holding apartment prices to about half what they are in inner Sydney, because Sydney faces much greater challenges with approval processes and natural topography.

"Sydney has one-bedrooms for sale at $750,000 where the most expensive in Melbourne tops out at $450,000," says Leoncelli. So is "kick-back inflation" as seen in operation for the student accommodation in Dudley House a one-off? Hardly. The only reason we know about it is because Fairfax chased the money trail for eight months across three continents. Official foreign investment data for Australia's most important investment category is so poor, however, and the regulators so negligent, that we don't actually know who, how, where or how much of this kind of investment there is.

The only answer to the question of what impact foreign investment is having on real estate affordability? Nobody has a clue. John Garnaut is Fairfax Media's Asia-Pacific editor.