"Typically, when property buyers go overseas, they prefer key markets such as New York, Los Angeles, San Francisco, Miami, Seattle, Portland, San Diego and Boston. These markets are more expensive but comparatively stable and they have diversified populations. In some cases these markets have a large Chinese population and better education systems," said Macdonald.

Tian said up to 80 percent of people looking for overseas property investments want to use them for themselves. These people are either buying properties for emigration purposes or for their children's future educational use.

An extreme example of that came in a CCTV report that revealed a Chinese mother buying a $6.5 million apartment in Manhattan, New York's most expensive district, ahead of her 2-year-old daughter's future university life.

It is very unlikely that nouveau riche Chinese will buy properties in a city that has an unstable economy and social environment just because they are cheap, such as Detroit in the United States or on the island of Cyprus in the European Union, said analysts.

Maureen Yeo, associate director of international project marketing in Knight Frank's Beijing office, said there was a surge in pure investment-oriented purchases among the Chinese.

"Before, most Chinese who bought overseas properties did so, especially in the UK, the US, Canada and Australia, for their children's education or to emigrate to. But after the central government further tightened real estate policies, more are tending to diversify their investment portfolios, given the rising policy risks," said Yeo

The new policy of levying a 20 percent income tax on home sales is not actually new in China. "It was introduced as early as 2010 but people selling their home have had the option of paying a 20 percent capital gain from the transaction or paying a 1 to 2 percent tax on the total property value, according to Chen Shin Ling, general manager of Taiwan-based Yungching Real Estate Agency in Shanghai.

"While the 20 percent tax will not directly lead to individuals buying properties overseas, a tightly controlled and heavily taxed market is less attractive to buyers than a more open, more lightly taxed market. So the combination of all the regulations designed to cool the market over the last five years will have encouraged buyers to look at overseas markets," said Macdonald.