Record number of Chinese buyers pump up property prices in Sydney

Home prices in Sydney could rise by as much as 10 percent over the next 12 months, driven in part by unprecedented levels of demand from China, according to McGrath Estate Agents.

As much as 80 per cent of homes in parts of Sydney are being sold to buyers from China, said John McGrath, chief executive officer of the company, which recorded A$7 billion (HK$50 billion) of property sales in the year to June 30.

Record-low interest rates and the biggest influx of investors in almost a decade are also fuelling prices.

"The Chinese market is extremely strong, the strongest I've seen in a new entrant into the market," McGrath said.

"Record low interest rates and the ability to fix such rates for a long period of time is very attractive."

Chinese buyers, facing government restrictions on purchases at home, were the third-biggest source of foreign investment in Australian real estate, behind the US and Singapore, in the 2012 financial year, the latest figures from the Foreign Investment Review Board showed. They accounted for A$4.2 billion of transactions, a 75 per cent jump from 2010, according to the data, which does not break out residential property sales.