It's a good point that prices in many countries are driven domestically (Australia!), however, I'd add/counter two arguments: - there's a few papers out there

It's a good point that prices in many countries are driven domestically (Australia!), however, I'd add/counter two arguments: - there's a few papers out there (alas, I don't have them) that show that you can go as low as 4% active investors and still have an efficient market (although I'm not sure to what extent this extends to real estate purchases); - even if the Chinese were not to touch real estate and stuck to treasuries, massive demand for treasuries would lower the cost of capital for everything else and therefore drive all asset prices (including and especially real estate) through the roof. FWIW we recently went to visit some houses in Sydney, and 90% of those doing the tours were non-English-speaking Chinese. About half the agents were also Chinese, some with limited English skills. Anecdotes, not data, etc.