"A couple of years ago, there was some chat from New Zealand about how the Super Rugby teams weren't killing it but then your national team still killed it. Until Super Rugby has a format where everyone plays everyone, it's hard to tell.
"One thing that's unquestionable is that the New Zealand teams have played very well. They have come out of the blocks hard and are playing good football. And they have a lot of good players coming through.
"It's one thing we have always known about New Zealand but I think they have shown it again this year."
Cheika was seen as a coach with a golden touch after taking over the national team towards the end of 2014, guiding Australia to the Rugby Championship title under an abbreviated format and then the World Cup final. He was also named the World Rugby Coach of the Year, although many believe that New Zealand's Steve Hansen deserved that accolade. Australia beat the All Blacks 27-19 in Sydney to claim the Rugby Championship with three wins from three but were thumped 41-13 the following weekend at Eden Park.
The two teams kick off this year's Rugby Championship when they play in Sydney on August 20 and will face each other three times this year.
The Wallabies will continue to develop a style under Cheika he hopes will bring sustained success.
"One thing you might be able to see is that we are playing rugby in a certain way," he said.
"We are playing at the international level with a running style - we are not kicking a lot - so that's very much in our mind.
"We have slowly pushed that out to our Super Rugby teams and down into club teams. That does not happen overnight. We are preparing for the future."