PHOTO: A woman walks by Chinese language advertisements for Australian property in Sydney’s Chinatown on June 21, 2017. Photo: AFP/William West

Sydney housing prices are down 7.6% off last year’s peak as Chinese purchasing eases and easy money dries up, but predictions of a full-blown collapse are overblown.

Australia’s property market is falling, with some pundits predicting an unprecedented crash as Chinese buying dries up and easy money lending is shut down.

While the doomsayers may be overstating the risk of a full-blown collapse, declining house prices are exposing some uncomfortable vulnerabilities in Australia’s economy.

In a nation where home ownership is high in global terms at 65%, property has proven a route to wealth and a comfortable retirement for many middle class Australians.