SYDNEY – For years, Australians have blamed soaring property prices on an influx of cashed-up Chinese property buyers.
A survey in July, for instance, found that 73 per cent of Australians believed that “foreign buyers from China drive up Australian housing prices”, with only 8 per cent believing that Chinese buyers do not add to prices and 19 per cent expressing a neutral view. 
Carried out by the Australia-China Relations Institute at the University of Technology Sydney, the survey also found that 78 per cent of Australians believe the amount of Chinese investment in residential real estate should be restricted, with 8 per cent disagreeing and 14 per cent expressing neutrality.
But it turns out that Chinese investment has had little to no effect on Australia’s decades-long property boom.
A new study published in June in the journal Housing Studies examined how Beijing’s 2017 crackdown on money leaving China affected property prices in each of Sydney’s 678 suburbs.
Eighteen months after the crackdown, which led to a fall in overall Chinese investment in Australia, restrictions had caused prices to drop by 3 per cent in areas with Chinese communities, but had no impact on property prices elsewhere.
Associate Professor Song Shi from the University of Technology Sydney, co-author of the study, said the impact of Chinese investors in Australia has been “much less – and less widespread – than many Australians think”.
“Our findings… suggest ongoing concerns about Chinese capital and Chinese investors driving up Australian home prices and exacerbating affordability problems are overstated,” he wrote last Monday in The Conversation, a website that publishes research and analyses by academics.
Other researchers had similar findings.
Dr Mona Chung, the director of consulting firm Cross Culture International who in 2017 conducted a study of the impact of Chinese investment in Australia, said the perception of Chinese buyers driving up Australian property prices is a “media myth” that dates back decades.
She said the myth emerged as China grew wealthier and its citizens were able to afford to buy property in Australia.
“You had no Chinese buying houses in Australia, and then you had pockets of Chinese buying in areas in Sydney and Melbourne – they became more noticeable,” she told The Straits Times.
“People often look for a cause of blame for why they can’t do something (such as buy a house).” 
Property prices in Australia have been soaring in recent decades. 
In Sydney, the average house price increased from A$166,000 in 1993 to A$1.36 million (S$1.19 million) today. The average price of an apartment soared during this period as well, from A$163,000 to A$822,000.
In Melbourne, the average house price rose from A$117,000 in 1993 to A$925,000 today. Apartment prices increased from A$116,000 to A$604,000.
These increases happened to occur as Chinese migration began to surge.
Since 2011, China has been one of the largest sources of migrants to Australia. As at June 2021, Australia had 596,000 China-born residents, an increase of 208,000 since 2011.
Of Australia’s 26.8 million residents, about 1.4 million have Chinese ancestry.
This Chinese influx has often been blamed for the property boom even though, according to analysts, it has played a minor – if any – role in the price surges.
Dr Shane Oliver, the chief economist at financial services company AMP, said public debate in Australia often focuses on “nice, simple explanations” for the property boom, such as Chinese buyers, tax incentives for property owners and investors, or rules regulating land development.
But he said the surges in prices were primarily due to two factors: “The shift from high to low interest rates, and the fundamental shortfall of supply relative to demand.
“Blaming house price rises on foreigners is attractive to some people, but it doesn’t stack up,” he told ST.
“When you look at the overall housing finance numbers at times when house prices surge, the surge is usually due to domestic borrowers getting money from domestic banks.”
He added: “Foreign buyers have an impact on property prices, but it is relatively minor.”
Dr Chung believes the frosty ties between Canberra and Beijing in recent years may have caused people in Australia to be more likely to accept the myth that Chinese buyers have fuelled a housing boom.
“Blaming Chinese buyers is not new, but in the last few years, the reason for it has become more political,” she said.
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MCI (P) 076/10/2022, MCI (P) 077/10/2022. Published by SPH Media Limited, Co. Regn. No. 202120748H. Copyright © 2023 SPH Media Limited. All rights reserved.