Real Estate

The Disproportionate Rise of China’s Real Estate Market

By Nicholas Hopper

Jul. 20 – China’s real estate market has seen massive development since it’s opening to private investors in the late 1990s. This rapid development, not unlike that seen in the United States before the 2008 crisis, is a risky one for several reasons, which we get into below.

For one, the disproportional value of real estate prices compared to the average citizen’s wages and standard of living has become cause for concern in today’s China. This can be seen when comparing office rental prices across various locations to each country’s GDP per capita, as illustrated by the graph below. Continue reading →

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China’s Property Developers Slash Real Estate Prices to Court Buyers

By Vivian Ni

Oct. 27 – China’s property developers are actually offering discounts to real estate buyers, as they need higher sales to refill their parched cash flows. Although the price decline has only happened in a few select areas and experts are still hesitant to interpret it as an exact sign of an overall downturn in China’s property market, positive outlook towards the sector is falling as the central government’s efforts to cool housing prices continues. Continue reading →

Posted in Business, Economy and Politics, Markets, Real Estate | Tagged Chengdu, China First Tier Cities, China House Price Decline, China Housing Bubble, China Interest Rate, China Property Developers, China Real Estate, China Reserve Requirement Ratio, China Second Home Purchase Restriction, China Tightening Monetary Policy, Foshan, Hangzhou, Nanjing, Shanghai | Leave a comment

A Guide to China’s Property Land Bank

Which cities have value, and which are overbuilt?

Op-Ed Commentary: Chris Devonshire-Ellis

Sept. 7 – One of the issues concerning China has always been the investment into property. For the past two decades, local and regional governments have used property investment to increase their GDP figures in order to meet Central Government targets. However, this has led to unhealthy reliance on property as a provider of growth, and many instances of corruption and collusion between officials and developers. China now has a massive property bank, spread across the nation, and the on balance sheet recorded assets of local governments have dictated that these have pushed prices in China up to astronomic levels. Continue reading →

Posted in Business, FDI and Foreign Trade, Real Estate | 5 Comments

China to Expand Real Estate Restrictions to Second and Third-tier Cities

Jul. 18 – Following the release of statistics on the first half of 2011 which show house prices are still growing in most surveyed cities, China’s State Council said on July 12 that it will continue to implement tightening policies on its property market and expand the home-purchase restrictions to second and third-tier cities.

Seeing surging property prices as one of the major contributors to China’s high inflation, the government has already been implementing a variety of restrictive measures on the country’s property market including home purchase limits, bank interest rate increases, and even a property tax in Shanghai and Chongqing. However, the most recently-released first-half statistics show investment in property development has still witnessed a year-on-year increase of 32.9 percent and commercial and residential property sales have also surged by 24 percent from a year earlier. As such, the Chinese government has decided to make further attempts to rein in the housing bubble. Continue reading →

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Will China’s Property Prices Reach a Ceiling Under Restrictive Policies?

By Vivian Ni

Jun. 7 – Since last September, the Chinese government has launched a series of restrictive policies on the country’s fast growing property market, hoping to make housing more affordable to its 1.3 billion people and bring down high inflationary pressure. The policies, often commented as being “unprecedentedly stringent,” are relevant to the interests of multiple groups, including property developers, local governments, and prospective real estate purchasers. In the complicated interest game, it remains to be seen whether or not a ceiling to the surging property prices will finally emerge.

Presently, China’s control measures on its property market cover the following aspects: Continue reading →

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St. Regis Opens Luxury Hotel in Lhasa

Jun. 2 – The St. Regis chain of luxury hotels, part of the Starwood Group, has just opened a five-star resort property in the Tibetan capital of Lhasa. The design of the St. Regis Lhasa is inspired by a nearby and still active monastery and is the highest altitude hotel in the world at 12,000 feet (3,360 meters) above sea level. Continue reading →

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U.S. Study Mission Discusses China’s Inflation, Living Costs and the Conspicuous ‘Housing Bubble’

By Cory Lam

SHANGHAI, May 26 – Some of America’s top executives in healthcare and education met at the Fairmont Peace Hotel in Shanghai last Thursday, in the second leg of a China-specific study mission organized by the American Society of Association Executives (ASAE) in conjunction with MCI China, a professional event management company based in Beijing.

The study mission, especially developed for CEOs and executive directors from the association community, was designed to provide a first-hand look at the current Chinese market and to seek out new opportunities to develop their U.S. businesses in China. Continue reading →

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Foreign Participation Surges in China’s Property Development

Mar. 29 – China’s restrictive policies on its real estate market have made it difficult for property developers to borrow enough loans from banks and for property buyers to hoard houses for investment purposes, but more and more capital – including a large amount of foreign capital – is flowing into real estate development enterprises in the form of privately raised property funds.

Tightening policies lead to foreign PE funds for property development
China’s property development sector has been witnessing an influx of foreign investment since the second half of last year. During the first quarter last year, the actual foreign capital used for property development saw a sharp year-on-year decrease of 33.7 percent, while during the second and third quarters foreign investment in the area surged by 2.8 percent and 26 percent respectively, from a year earlier. A March 9 report on China Securities Journal estimated that the total amount of foreign capital in China’s real estate industry in 2010 exceeded RMB150 billion. Continue reading →

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