Published on 25 October 2005 at 02:31 pm
Filed under: Asia:- China Property Guides » China: The Property Investment Potential
The potential for property investment in China is huge because the Chinese economy is the fastest growing economy in the world and spans multiple sectors - one of which is real estate - and because the Chinese government are seeking to target overseas investment and have changed the laws to allow foreign purchase of Chinese real estate.
Furthermore an investor has both the commercial and residential property markets to consider for his portfolio and also has both local and foreign demand for property in China to target for income and profit.
The foreign freehold potential in the property market in China is in its infancy so while policies develop and are refined, an investor taking his chance today will benefit from a maturing market and fantastic predicted gains over the medium to long term. An investor should be aware that only certain developments and properties are available for sale to overseas buyers and that a local lawyer should always be instructed when purchasing property in China to ensure that everything is correct and legal with the sale.
The majority of the most attractive residential and commercial developments in China are centered around Shanghai which is the business and trade hub of the entire country and where in excess of 30% of the countries taxes are generated. Other interesting cities for an investor to consider are Beijing, Guangzhou, Tianjin, Shenzhen, and Dalian but Shanghai stands out most because it is the fastest growing city in the world in terms of its size, population and output.
As a result of this fact Shanghai is an incredibly exciting, multicultural hub that embraces the best of ancient China and the best of the modern world. A number of large international companies are establishing their Asian bases in Shanghai, employment prospects in the city are good and getting better, the population is growing rapidly in size and purchasing power and creating an insatiable demand for residential real estate. The government of China is actively encouraging foreign direct investment into Shanghai with a focus on residential real estate development to combat the growing demand/supply issue - therefore the market in Shanghai is currently ripe for property investment.
If you need further convincing: -
It’s currently fact that property prices in Shanghai are undervalued when compared to other great cities worldwide, this will likely change as the wider world learns of the attraction of the city and the potential for profit in Shanghai and subsequently the demand for property further increases.
Demand for property in Shanghai will likely surge following the promotion of the city during the 2008 Olympic Games and the 2010 World Expo.
The Chinese government has just released the country’s currency from its US dollar ties because the ties were keeping the Yuan undervalued by up to 40% - this will start to increase the intrinsic value of property assets held immediately and for the short to medium term.
And finally, the Chinese Housing Reform has been increasing local real estate ownership figures by around 10% annually creating a huge local market for a property investor to target and rely upon to strengthen in purchasing power and demand.
Investment conditions are ripe and the long term prospects for the profitability and sustainability of the Chinese property market are exceptional.
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