Hot Property - A Guide to Foreign Investment in China's Property Market

by Cher H. Lim, Head, National Special Projects Advisory, Dezan Shira & Associatesby Fiona Yuan, Manager, Dezan Shira & Associatesby Zoe Zhou, Manager, Guangzhou, Dezan Shira & Associates

In 2002, China eliminated differences between local and non-local purchase of real estate, making it one of the few countries worldwide with no limits on real estate investments. In 2005, foreign investors bought properties in China worth at least US$3.4bn, with US$5.4bn being co-invested in housing projects with local partners.

The overall economy has grown at an annual rate of some 9% since 1978, but property costs in Shanghai and Beijing are still low compared to Tokyo or Hong Kong. But a further boost to prices is expected as the Chinese currency slowly revalues from what many believe to be a low base. As well as rising prices, financing methods are changing – now, about 50% of all investments are loans. And the Chinese government has recently introduced various measures aimed at limiting foreign speculation in the mainland market. All this has focused attention on the sector.

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This article included in China Briefing Magazine

October 2006: Hot Property - A Guide To Foreign Investment in China's Property Market

Other articles in this issue: Current rules and regulations for foreign investment in real estate by Dezan Shira & Associates, Investment Intelligence Unit, Greater China Minimum Salaries Rise In Tight Labour Markets - China by Dezan Shira & Associates, Investment Intelligence Unit, Greater China The Status of Land in China and the importance of due diligence by Dezan Shira & Associates, Investment Intelligence Unit, Greater China