An Australian parliamentary inquiry into foreign purchases in the domestic real estate market on Friday raised concerns at Chinese property investors who obtain finance through "shadow banking" in China, local media reported.
The committee's deputy chair, Ed Husic, said the so-called " shadow banking" market in China was a system that usually lacks regulation and oversight.
"With the rise of the shadow banking system in China, where people are going outside of the banking system to be able to finance investment, there are some concerns about the quality of the loans and whether or not they will actually be durable," Husic told the ABC.
"If those loans are being used to finance development in Australia, and if they fall over, what is the exposure of the Australian banking system to that?"
"I think these are things we are very keen to pursue and we will be looking to talk to the Reserve Bank further about that in due course."
The committee is investigating complaints that property price hikes in major Australian cities may be fuelled by an influx of foreign buyers.
Current rules allow non-residents to buy new property, but not purchase existing dwellings.
The committee has heard that some foreign buyers consider the existing 85,000 Australian dollar (80,000 U.S. dollar) fine for buying existing dwellings just a cost of doing business.
The government and committee members believe foreign investment in real estate benefits Australia and the economy, but there are concerns about regulation and enforcement.