A new report foresees a surge in Chinese demand for Australia's residential real estate, which is set to push prices even higher in one of the world's least affordable property markets.

A new report from Credit Suisse says Chinese appetite for Australian property will soar in tandem with the country’s rapidly growing affluence.

The report notes that investment demand from China has already had a major impact upon Australia’s urban housing market. China currently accounts for in excess of $5 billion in Australian residential property purchases per annum, which is equivalent of 12 per cent of new housing supply.

The impact of Chinese demand is concentrated in Australia’s major cities, however, where they presently account for 18 per cent of Sydney’s new housing supply,  and 14 per cent in Melbourne.

Credit Suisse expects these figures to continue rising as Chinese economy grows and the size of the country’s affluent population increases.

There are 1.1 million Chinese nationals currently possessing the economic wherewithal to afford an apartment in Sydney – a figure which Credit Suisse sees increasing by 30 per cent by the end of the current decade.

This will translate into an additional $44 billion in purchases of residential property in Australia over the next seven years, as compared to $24 billion during the preceding seven-year period.

The trend will serve to push housing prices even higher in a country with one of the world’s least affordable property markets.

The 2014 Demographia International Housing Affordability Survey recently found that Australia’s two most populous cities of Sydney and Melbourne ranked amongst the top 10 least affordable cities in the world, with Sydney coming in fourth and Melbourne taking sixth place.

Credit Suisse points out that Chinese nationals possess multiple means at their disposal to enter the Australian property market.

Chinese nationals who are temporary residents in Australia or even residents outside of Australia are permitted to purchase new residential properties with FIRB approval, with no restrictions on the number of dwellings they are allowed to acquire.

They are also permitted to buy existing residential properties for redevelopment, with FIRB usually willing to provide approval as long as this will increase Australia’s housing stock.

Chinese citizens who are temporarily based in Australia are also allowed to purchase established homes to reside in themselves, with a limit of one per person.

The Significant Investor Visa (SIV), which was introduced in 2012, is set to significantly expand this area of the market. The visa allows individuals with high net worth to reside temporarily in Australia with their families on the condition that they invest $5 million in approval Australian assets.

The final means by which a Chinese national can acquire Australian real estate is to obtain status as a permanent resident, which will enable him or her to purchase to property for residential or investment purposes without the need to obtain approval.