Proposed Chinese investment in Australian real estate has halved in the wake of Chinese and Australian government controls, according to the Australian government’s Foreign Investment Review Board (FIRB).

In its annual report, FIRB said proposed Chinese investment dropped to AUD15.2bn (€9.9bn) during the fiscal year ended 30 June 2017 from AUD31.5bn the year earlier.

But China remained the biggest foreign investor overall, both by value and by number of approvals, in fiscal 2017.

FIRB said a majority of approvals sought by Chinese investors were in residential real estate.

It said the decline likely reflected a range of factors, including the introduction of FIRB application fees, Chinese ODI capital controls and changing macroeconomic conditions.

“For business investment, there has been a shifting focus of Chinese investment toward emerging sectors such as renewable energy and health care, along with established sectors such as services, mineral exploration and development and agriculture,” the report said.

Foreign investment approval in the commercial real estate sector during the period was given for 465 proposals valued at AUD43.7bn, down from AUD49.7bn the year earlier.

The decline in value was largely due to a significant decrease in approvals for existing commercial property.

FIRB said the US was Australia’s second-largest source of approvals by value, with AUD26.5bn worth of approved applications.

But US investment in Australian real estate slipped from AUD8.2bn to AUD6.8 billion.

Canada overtook the US as the second biggest buyers of Australian property, investing AUD7.2bn last financial year compared with AUD3.1bn in the previous year.

The next three top source countries for proposed investment in infrastructure and real estate by value were Hong Kong, Singapore and Japan.