Urban property markets in Australia have hit record highs on the back of burgeoning demand from cash-flush Chinese investors.

A new survey from RP Data and Rismark indicates that the median price for a house in Sydney has surged to a record high of $824,000, while in Melbourne it has lifted to $697,000 and in Brisbane it has reached $509,000.

In Sydney and Melbourne, these figures translate into a price increase of over a third in just the past year.

Media reports and industry anecdotes imputing the surge in real estate prices to investors from China have been supported from a report by Credit Suisse.

According to the bank’s figures, Chinese buyers are expected to spend at least five billion dollars on residential property in Australia this year. PRC nationals currently account for around 12 per cent of new home purchases throughout the country, focusing their investment on the major urban centres.

While Chinese nationals comprise around seven per cent or less of new home buyers in regional markets, they account for 18 per cent of new home purchases in Sydney and 14 per cent in Melbourne.

Credit Suisse further estimates that Chinese investors – both PRC nationals and recent immigrants – have spent $24 billion on Australian property over the past seven years, and that this figure is set to rise to $44 billion over the next seven years.

While the influx of Chinese investment is being welcomed with open arms by realtors and sellers, concerns are mounting that it could cause a bubble in Australia’s real estate market and that it may price out first home buyers.

Dr. Andrew Wilson, senior economist with Australian Property Monitors, said that after the past year of vigorous growth Sydney’s price levels have now reached “unsustainable,” heights and early signs of affordability barriers are beginning to emerge.

Australia was recently ranked fifth on a list of the world’s most overpriced housing markets. According to the list, which was prepared by consultancy Knight Frank, the country was beaten out only by Norway, Canada, Belgium and New Zealand in terms of the relative expense of residential property.