The upshot is the major ballast that Chinese investors (and other on- and offshore speculators) have given to desirable overseas housing markets such as Auckland is slowing. The Australian Financial Review reports that this has already been marked in Sydney, where real estate agents report that the appetite from Chinese investors has diminished.
In some other desirable markets like Vancouver, there are expectations that the appetite among Chinese investors to buy houses there to derisk their own financial situation will lead to further increases in housing prices. But this does not appear to be the case here.
China already has controls on the amount of capital its citizens can invest offshore. But - as with other nations during their own periods of financial liberalisation - these are frequently ignored as those "in the know" find ways to escape the net.
In New Zealand there is another factor at play.
Chinese investors - many of whom bought NZ houses "sight unseen" from online catalogues in response to offshore marketing by New Zealand real estate firms - have slowed their acquisitions here, according to anecdotal evidence.
If the Chinese capital flight crackdown - even if applied by its banks - has the desired effect, this will have an effect here.
The Chinese Government crackdown on capital flows, which began late last year, is obviously a key factor.
But there is also anecdotal evidence that the NZ Government's October measures to take some steam out of the Auckland housing market have had an effect.
In particular, there is the requirement for non-resident buyers to provide a tax identification number from their home country, open a New Zealand bank account and get an NZ IRD number before they can buy an NZ residential property.
Banking insiders say that it had been evident that many acquisitions of NZ houses were not passing through the local banking system. This had been a major concern for the NZ banks - not simply because their ability to write mortgages was being affected (although that was an issue) but also because of concerns that some transactions were borderline.
Before the October 1 changes, it was theoretically possible for non-resident buyers to arrange "cash deals" and elude the tax net in both countries. This is no longer possible.
Other measures like the new "bright line" test, which means gains from residential property sold within two years of purchase will be taxed (unless the property is the seller's main home, inherited from a deceased estate or transferred as part of a relationship property settlement), affect both New Zealand residents and non-residents.
The Government's object was to target those out to make a quick buck from property gains.
While the NZ Government's measures affect non-resident buyers from all nations, the Chinese Government would have quietly welcomed the move. Last year, China's own tax agencies had stepped up enforcement of a regulation requiring its citizens and companies to pay tax on their worldwide income - not just what they earn in China.
The October 1 measures have given the Chinese tax authorities a window into the investments their citizens are making in the residential housing sector in New Zealand and their potential to earn rental income.
The NZ Government has been publicly silent on this issue, but there is no reason to believe the negotiations China has been holding with the United States and other nations to share information on its citizens' overseas bank accounts haven't occurred here.
Bloomberg this week reported that China's foreign exchange reserves are now under pressure. The informal banking crackdown may be sufficient to stop China from having to impose formal capital controls to reduce the amount of money going overseas.
It noted the tighter rules are in response to a record US$108 billion fall in China's foreign-currency reserves in December, to the lowest level in three years, as capital left the country and the central bank was forced to defend the yuan.
If the Chinese capital flight crackdown - even if applied by its banks - has the desired effect, this will have an effect here.
New investors hoping for major capital appreciation on the Auckland market may have to wait for the next bull run.
