Sydneysiders awoke on Thursday to the news that the median house price in Australia's largest city had climbed above a million dollars.
The milestone is sure to set off another round of handwringing about the effect of Chinese buyers on the Australian property market. Just as in Auckland, Chinese buyers are being blamed for buying up thousands of houses and locking ordinary Australians out of the property market.
Tabloid TV and newspapers in particular have fanned the flames. "Ten million Chinese buyers look to buy Australian homes," the Herald Sun warns us. "Fears Chinese investors are pricing first-home buyers out of the market," the Daily Telegraph says.
Despite all the heat and fury around real estate purchases by Chinese citizens, there's very little real evidence that they have much if any effect on overall house prices. In fact, there are some persuasive arguments why home purchases by Chinese might actually be a good thing.
The main reason Chinese purchases are having little effect is the restrictions placed on foreign home buyers in Australia.
Unlike in New Zealand, where foreigners are free to buy houses up to the value of A$10 million, non-residents are limited to buying newly built homes in Australia.
So when that first-home buyer is outbid at a Saturday afternoon auction, it's rarely by a Chinese buyer. While sometimes the winning bidder may be of Chinese origin, the law requires them to be a citizen or a resident, with as much right to buy a home as any other Australian.
And it's questionable whether overseas Chinese are looking for the same sort of properties as the rest of us anyway.
We might aspire to a Victorian terrace in Paddington or a Federation house in Haberfield, with all their old-world charm, rising damp and leaking roofs.
But the Chinese mostly want apartments, dense urban living, and above all, newness.
Even the ultimate Sydney dream - a house with a harbour view or even a harbour frontage - holds little allure for most Chinese. They'd rather be by a river or a lake.
Buying by Chinese citizens is mostly limited to new apartment developments. But even then, their influence is limited.
It's hard to get a precise figure on how much real estate the Chinese are buying, but many estimates put the figure at about 20 per cent of new homes. That sounds like a lot initially, but it's worth noting that it's only new homes, which are only a small slice of the overall housing market.
What's really driving the surge in property prices is limited land releases for new dwellings, generous tax breaks that make buying an investment property a very attractive proposition, and record low interest rates in particular.
Consider this: back in December 2008, when the Sydney median house price was "only" A$540,000, the banks' benchmark interest rate for home mortgages was 9.45 per cent. That means the interest on a A$500,000 loan would come to about A$4000 a month. But with interest rates currently at about 5.2 per cent, A$4000 a month can pay the interest on a A$920,000 loan.
These numbers pretty much align with the rise in house prices over the same period.
What's really happening is this: instead of pocketing the savings to be had from low interest rates, Sydneysiders are using the money to pay more for their houses.
It's a pity really. It doesn't do any good for anyone except real estate agents who earn higher commissions, state governments which rake in more property taxes, and property investors.
It doesn't even do much good for existing homeowners, whose paper wealth has increased by many hundreds of thousands of dollars. They can't cash in the gains unless they get out of the property market altogether - and anyone with a toehold in Sydney real estate would be foolish to give it up.
The reason the Chinese are singled out is because of a handful of well-publicised transactions, like the A$39 million purchase of a harbourside mansion by China's 15th-richest man. That sale was overturned by Australia's Foreign Investment Review Board and Xu Jiayin was forced to sell.
There is also the news that a Chinese student paid A$14 million for a city apartment, while another has snapped up an as yet unbuilt apartment in the city centre for A$18 million.
The idea behind limiting foreigners' home purchases to new developments is to make sure their investments add to Australia's existing housing stock.
In this respect, Chinese property purchases should be viewed as a good thing. They are creating demand for new apartments, which in turn is increasing Sydney and Melbourne's overall housing stock and boosting employment. Without the prospect of Chinese buyers, it's doubtful many developments would have got off the ground.
There's no sign yet that the Chinese sharemarket rumbles have dampened the Chinese appetite for Australian property. If they eventually do, it shouldn't be a cause for celebration.