Chinese demand for property in Sydney and Melbourne is diminishing and investors are now looking towards buying homes in southeast Queensland, reports Bloomberg.
According to John McGrath, chief executive officer of McGrath, Chinese demand is moving to Queensland because the dwelling values are "compelling".
Similarly China's stocks have tumbled and the country's economy has slowed, which has seen Chinese interest in the Australian property market decrease in general.
Figures from McGrath are showing that house prices in the areas of Sydney and Melbourne are currently at the end of their "growth cycle".
Reported by Bloomberg, it seems that over the past three years, house values in these areas have increased by 47 per cent, which has seen the average value of a house in Sydney climb to $1 million AUD.
However, house prices in Sydney have dropped by 1.4 per cent since November, which is the biggest decline this particular property market has seen in half a decade.
Mr McGrath believes that there are a number of reasons for the decline in the Chinese interest in the Australian property market but attributes much of it to China's stock market issues.
In fact, the Shanghai Composite Index has dropped almost a third since its last recorded high in June of this year.
It also seems that Chinese interest in investment has shrunk due to the strength of prices in the Australian market.
The Australian property market is currently enjoying record prices, which is a double-edged sword as the market is strong, but it can discourage investment.
Successful auctions have also dropped considerably to the lowest rate for the past three years, which again is a result of the strong market in Australia, according to Mr McGrath.
Although the strong price of property is off-putting to foreign buyers, this does leave the window of opportunity open for an increase in domestic investments.
