Demand from China is driving a boom of the Australian property market, China Business News reported on Friday citing institutional reports.

Chinese buyers in Australia spent about $4.5 billion on residential real estate per annum, which equals to 12.5 percent of the country's new homes, according to a report by Credit Suisse.

A committee under the Australian Senate is starting an investigation to see if overseas buyers are causing difficulties among local first-home buyers, said the China Business News.

Home values in Australia are 10.9 percent higher over the past 12 months, with values in Sydney rising 4.2 percent in the last three months, according to RP Data, an Australian property information provider.

Chinese investment into Australian real estate has grown by almost 60 percent in the past two years, targeting Sydney and inner-city Melbourne, said the Australian news.

Chinese nationals and newly-arrived immigrants have sunk around $21 billion in total into Australian property over the past seven years, said the Credit Suisse report.

China Business News adds that there are other drivers behind to the boom including short supply, tax preference for residential investment and a historically low benchmark interest rate of 2.5 percent.

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