Global investment bank Credit Suisse expects Chinese nationals to sink around $44 billion into Australian residential real estate over the next seven years.
Combining what information is available from the Foreign Investment Review Board, Department of Immigration and Bureau of Statistics to estimate Chinese residential property investment, the bank puts it conservatively at more than $5 billion per annum.
The Credit Suisse report estimates that Chinese investors and newly arrived immigrants have spent about $24 billion on Australian property over the past seven years.
Given the restriction on non-permanent residents forcing them to buy newly built properties, Credit Suisse estimates that Chinese buyers are currently purchasing around 12 per cent of new homes in Australia.
However, the report's authors say that buying is concentrated in Australia's two largest cities, meaning that an estimated 18 per cent of new dwellings in Sydney and 14 per cent in Melbourne are being purchased by Chinese nationals.
The level of Chinese buyers in other markets is estimated to be 7 per cent or lower.
While Chinese buyers are still a relatively small proportion of the overall property market - especially since non-permanent residents cannot buy established homes - the report's authors say they have a large influence on prices.
"The marginal buyer of Sydney and Melbourne real estate has changed, as have the drivers of property prices," the report observed.
Translated from economic jargon, a "marginal buyer" is the bidder that trumps everyone at an auction, when most think the price has gone too high.
Such buyers, even if a minority, often set a benchmark for expectations in the market - 'my neighbour got X, Y, Z, so I want X, Y, Z plus one', being a mentality in rising property markets that real estate agents are only too familiar with.
The analysts point out that Sydney is fourth and Melbourne fifth in Demographia's list of the least affordable cities for home prices relative to incomes - only Hong Kong, Vancouver and San Francisco rank higher.
However, they warn the increase in Chinese property investment could worsen this situation.
"While Australia has some of the most unaffordable housing in the world, further strong Chinese demand can push prices even higher," they forecast.
"A generation of Australians are being priced out of the property market. Many face a lifetime of renting."