"The main impact is from the introduction of new taxes in Australia," he said.

Mr Wang said the Australian government may have "overestimated the attractiveness of the market" for Chinese buyers.

From July 1, NSW doubled the stamp duty on foreign buyers to 8 per cent and increased the land tax surcharge from 0.75 per cent to 2 per cent.

This follows Victoria increasing stamp duty for foreign buyers in 2015 and imposing an absentee tax on landlords from the start of next year. The federal government also introduced a range of measures to make it more expensive for foreigners to buy property in Australia as part of its May budget.

Less focused

Another China-based real estate agent, who asked not to be named, said buyers were generally less focused on Australian property and that south-east Asia and Britain were the hot markets at present.

These comments are consistent with data provided by Chinese language property portal Juwai.com that showed searches on Australia were down a third in the first six months of the year compared with the second half of last year.


When the first half of this year was compared with the same period in 2016, searches for Australia were down nearly 10 per cent, while global searches were up 8.7 per cent, Juwai said.

Juwai cited new taxes, local banks not lending to foreign buyers and tougher controls on taking money out of China as the main factors behind the drop in interest in Australia.

Apartments record

This comes as a record number of new apartments are set to come onto the market over the next 12 months.

Chinese buyers account for nearly 80 per cent of all foreign property purchases in Australia.

They typically buy apartments as foreigners are prevented from buying existing dwellings in Australia, unless they plan to knock the property down and build a new one on the site.

This had led to speculation the apartment market may move sharply lower over the next year, even as prices for detached or existing houses remained robust.

But data from Fairfax Media's APM and the National Property Research Company indicates historically these two markets move together.


"What most people would think is that the volatility in house prices would be less than the apartment market," said National Property Company's Matthew Gross. "This is not the case for Sydney or Melbourne.

"By and large, the two markets move together, albeit housing is the more likely to experience the greatest quarterly correction in Sydney."

Brisbane different

However, he did note Brisbane was slightly different.

"[In Brisbane] when the market softens, it has been the apartment market which has fallen harder than the housing market," he said.

Mr Gross said these falls were most notable in March 2005, September 2008 and most recently September 2011.

APM's research manager, Odi Reuveni, said there was no evidence to suggest apartment prices would fall first, leading to a drop in house prices.

"It appears the movement is in tandem," he said.