Chinese demand for Australian properties drops by 15%
The slowdown of the Chinese economy has affected the Australian housing market, with demand from China falling as much as 15%, according toestate agent McGrath. Chinese investors are also shifting their focus towards better-valuedproperties in southeast Queensland, rather than Melbourne or Sydney, where prices have risen 47% in the last three years, resulting in the average price of aSydney house rocketing to AUD 1m. However, prices dropped 1.4% in November, the biggest decline in at least five years, and auctions also declined to a three-year low. 

Chinese demand, which helped propel a surge in Australian home prices, has dropped as much as 15 per cent from a year earlier as China's stocks tumbled and the economy slowed, according to real estate agent McGrath.

Buyers from mainland China are turning away from Sydney and Melbourne and looking at southeast Queensland where dwelling values are "compelling", John McGrath, chief executive officer of McGrath, said after the firm debuted on the Australian share market in Sydney on Monday. The shares opened at $1.94 compared with the issue price of $2.10 in an initial public offering that raised $129.6 million.

A poll of China-based real estate agencies found 149 of 150 of them expect demand to surpass their 2015 appetite. Credit: Angela Wylie

Sydney and Melbourne prices are at the end of the "growth cycle", McGrath said. After running up 47 per cent in the three years to October, sending the value of an average Sydney house to about $1 million, home prices in the city dropped 1.4 per cent in November, the biggest decline in at least five years. Successful auctions also dropped to a three-year low in Australia's most-populous city as record prices put off buyers.