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The Real Estate in China Is Booming

Jan 24, 2008
China is an incredible destination that provides tourists, investors, and prospective residents with a wealth of opportunities. From 1949 when the Communists took over the country to 1990s, there were only few office set ups and housing units in China. But, the country has now changed tremendously, and one can see high-rise commercial buildings and luxury apartment blocks dominating the skyline of China.

All of the destinations in China, especially Beijing and Shanghai, are considered hotspots for investing in real estate, no matter it is residential or commercial properties. When Beijing is the capital and the seat of administration in the country, Shanghai is regarded as the trade as well as financial center of the country, and is home to the Shanghai Stock Exchange. Investing in Shanghai property market can undoubtedly fetch handsome returns in the form of rental income, since it is highly westernized because of its long tradition of international trade as well as European influence.

Now we will discuss some of the prime reasons that attract savvy investors to invest in China real estate, which include:

- First of all, China boasts of one of the world's fastest growing economies

- With the set up of the World Trade Organization, China has now become the leader of the global economy

- Real estate prices in many of the cities in China such as Shanghai are presently one third of other world's global cities such as New York, London, Tokyo, and Hong Kong. This is perhaps due to the explosive number of foreign direct investments per year
- Shanghai in China has been chosen as the venue to host some parts of the 2008 Olympics

- In contrast to other countries in Asia, China has very low crime rates. This in turn makes the country a safe place to live in

- Above all, the country is welcoming for westerners due to highly educated, amicable, and well mannered Chinese people

Investors interested in investing in property markets are categorized into institutional investors, commercial property investors, and residential property investors. Institutional investors fall under the category who is interested in investing in high rise office complexes as well as latest retail units, due to their increased demand and chances of shortage in future.

In the case of commercial property investors, they invest largely in properties such as small office spaces and commercial lands. When comes to residential property investors, they mostly invest in residential properties including villas, condominiums, apartments, single detached houses, townhouses, and serviced apartments. Some may invest in these properties to sell them in future when their prices rise, while some invest them in order to rent it out and yield good profits.

The price of a property in China varies depending upon the nature of the property and the area where it is situated. For instance, a standard apartment in Puxi near Shanghai is about RMB 20000 per square meters. On the other hand, the price of a serviced apartment attached with high end amenities and facilities may go up to RMB 30000 per square meters. According to certain recent reports, the price of a 60 square meters studio in one of the posh areas in the country starts from about 90,000 Pounds.

People who are interested in real estate in China can either invest it in property itself or via a REIT (Real Estate Investment Trust), which in turn is a firm that invests its assets in real estate holdings. One of the prime benefits of investing through REIT is that they offer tremendous tax benefits, since investors need not have to pay any tax over the dividends. Another great benefit is that investors can buy or sell them just like stocks. Above all, no minimum amount has been set in order to invest in a real estate investment trust.

There are a number of real estate firms in the scenario in order to help you find your dream property in China. These firms undertake a range of services in connection with real estate, such as, market analysis, advertising, negotiation with sellers, and providing the services of professional attorneys in order to check the authenticity of documents pertaining to property.
About the Author
Wantanee Khamkongkaew is an independent author evaluating and commenting on leading International Property Consultants in Asia and Greater China , especially CB Richard Ellis.
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