Foreign investors could soon be having less of an impact on the Australian property market as a result of the on-going share market turmoil in China.

According to the director of a property group who market Australian properties to Chinese buyers, the recent stock market troubles could the flow of Chinese money to Australia dry up.

Andrew Fawell, director of Beller Group told the Australian Financial Review the Australian market should be prepared to see less Chinese money in the coming months.

Reports are coming in of investors claiming they have lost all their capital on the stock market and cannot go through with the deal," Fawell told the AFR.

"The Australian market has to be braced for unexpected events," he said.

While Chinese buyers a easily the biggest foreign investors in Australian residential real estate; accounting for around 21% of Foreign Investment Review Board approvals in 2014, a slowing of their involvement may not result in the price drop off many would hope for.

A recent report from valuation company Propell claimed that foreign investors have a much smaller impact on property prices than many believe and are likely only behind an increase of prices in certain suburbs.

“That foreign purchasers of houses are driving up house prices has been a familiar refrain in news headlines in past months. However, they are an easy target, especially in Sydney, where commentators seek to explain the runaway growth in house prices,” the report said

“Like any urban legend, it has become ingrained, but it is far from the truth.

“Foreign purchasers have had a significant impact in a small cluster of prestige suburbs in Sydney and Melbourne.”