It does seem as though property in China is starting to lose its fizz. To be honest, I'm not sure how this will affect us here.
Obviously this coincides with decreased demand for commodities, so that will put pressure on the dollar, our terms of trade, current account, etc.
On the other hand, Chinese investors have been buying up RE here because they perceive their own property as being well and truly overvalued, and besides they don't trust the government. This might make Australian RE even more attractive to them. Our property market is pretty frothy as well but nowhere near as bad as China.
My instinct is to compare this to the popping of the Japanese bubble in 1991. The Japanese had bought a lot of Australian assets and bid up the price for a lot of them. When Tokyo-Yokohama prices started to fall from truly nose-bleed highs, a lot of the Japanese companies sold off all of their Australian assets for cash so they could weather the storm at home. Even during the GFC the Japanese were still deleveraging overseas assets.
But I suppose the difference is that the Japanese trust their government to not steal their lunch if they bring it home whereas the Chinese don't.
But on balance, I think this will be a distinctly bad thing for poor old Aus. Hopefully old man India can pick up the slack with the new crew in charge.
If you're interested in this macro economic stuff I strongly recommend Macro business. This is a recent link discussing exactly this topic:
http://www.macrobusiness.com.au/2014/05/is-australian-proper…
I don't agree with everything they write, but they are cogent and generally well researched.