Analysts predict up to $60 billion of Chinese money will be poured into the Australian housing market in coming years.

A Credit Suisse analysis shows Chinese investors and immigrants invested over $8 billion in Australian residential property in last 12 months, with growing demand expected to see about $60 billion coming to the local market in the next six years.

Chinese investment was worth $8.7 billion in 2013-14 - the equivalent of 15 per cent of national housing supply - up 60 per cent on the previous 12 months.

“We expect $60 billion of additional Chinese demand for Aussie housing over the next six years to 2020. This will be more than double the $28 billion over the past six years,” the report by analyst Hasan Tevfik said.

$7 billion, or 80 per cent, of this investment was concentrated in Sydney and Melbourne – some of the most expensive cities in the developed world.

The analysts say new foreign investment rules could make Australian real estate less attractive for Chinese buyers, but “the potential erosion of demand will be marginal”.

“After all, Australia is on the doorstep of the greatest wealth creation in three centuries. Despite moderating growth, we expect more Chinese wealth to be invested abroad.”

Credit Suisse says foreign investment demand should be encouraged to move into new housing and away from established housing.

“This is positive for the Australian economy, in our view,” the report says.

Mr Tevfik says Chinese demand for Australian property will stay strong due to the fact that some many Chinese p[eople are becoming Australian residents. There is a forecast for two per cent growth per year in new settlers from China and Hong Kong, but the investment flows from these markets is expected to grow at a rate of five per cent per annum.

The growth rate of the amount of Chinese millionaires in the next few years is estimated around 14 per cent a year.

“So the number of USD millionaires will likely rise to 2.6 million by 2020, or more than the current population of Brisbane,” the report says.