Offshore developers are building far more apartments in Melbourne than local operators, as conditions swing in their favour for the first time.
Well over half of the apartments released last year were from foreign interests, a trend that has accelerated dramatically over the past five years.
Companies like Far East Consortium, Mammoth Empire Group and Hengyi Australia now have a strong development pipeline in Melbourne and are benefiting from a GFC-related local credit squeeze and sales networks into Asia.
They have shifted the focus towards international apartment buyers, a switch that may change the market's supply and demand dynamics, analysts Charter Keck Cramer say.
Such a substantial level of international purchaser, developer and finance activity in Melbourne has not been seen before and the participants' reaction to changing market conditions was unclear, CKC's Robert Papaleo said.
A record number of apartments - 25,500 - are expected to be completed in metropolitan Melbourne in the next two years, CKC figures show. In order to soak up the huge numbers, more than one-third of all new arrivals in Melbourne over the next two years will have to opt to live in an apartment, the figures suggest.
But Colliers' residential managing director Tim Storey said many offshore developers used local banks and faced similar debt constraints to local developers.
Colliers is one of the largest project marketers in Melbourne, selling a high proportion of large-scale CBD apartment blocks.
Mr Storey said it was a "misconception" overseas buyers were driving the apartment market.
"The reality is apartment sales are being driven by continued population growth seen in the city," Mr Storey said.
Up to 80 per cent of apartments in the city are bought by investors, but there are no official figures about the level of foreign ownership.
Mr Storey said settlement figures from recent projects suggested that figure was also changing.
The first stage of the 700-unit Upper West Side development has just settled with an almost even split between investors and owner-occupiers.
Valuer Sam Tamblyn from Urban Property Australia said Asian investors were keen to diversify their property holdings and Melbourne was high on the list.
"Investors from Asia have emerged as major players in intercontinental property capital flows, treating property more like a commodity asset," he said.