A Guide to China Property Investment
From its unique cuisine to its incredible sights, China has appealed to Westerners for centuries. This country has stolen the heart of many an adventurer and now it is winning the confidence of property investors. Indeed, China property investment is a very appealing prospect for many.
With its booming tourism industry, growing economy and stable government, China has the interest of many buyers. We at Nubricks.com cite the following 10 reasons as those driving investor confidence in China property investment at the present time: -
1) Stable Government Lends Itself to Inspiring Investor Confidence
China does have a communist form of government, which does turn some investors off. Despite this, the governmental stability here is quite impressive. The ruling party has been in place since the 1940s, ushering China out of its shell and into worldwide prominence as a manufacturing giant. The country’s stability does inspire confidence among many investors who seek markets backed by strong governments with longstanding track records upon which they can base certain forward assumptions
2) Strengthening Ties with the UK and other Countries Inspires Confidence
China has been working very hard to develop stronger economic and political ties with the UK and other foreign countries. With the upcoming 2008 Olympic games, the eyes of the world remain on this country. Overall, relations between China and the UK are quite strong, which works very well to inspire British property investor confidence in this market in particular.
3) China’s Booming Economy Very Much Inspires Real Estate Investor Interest
China is a country of financial contrasts, but its overall economic picture is very strong. The country’s GDP was USD 2.22 trillion in 2006 - the growth rate comes in at a whopping 10.7% per annum. The economic growth and stability of China work well to inspire investor confidence in this market. The economy itself is driven by manufacturing, tourism and agriculture and is so rapidly expanding that it is attracting massive interest.
4) The Growth of China’s Real Estate Market Appeals to Property Buyers
Although the Chinese government has put programmes in place to keep growth in the real estate market in check, investors are finding the luxury market here still offers much potential. The growing demand for high-end properties is raising prices and interest among foreign investors. Rather than purchase directly, some foreign investors are buying stock in development companies. Others are buying directly for personal use and eventual resale. The overall interest in this nation’s property market is very high. Investments in the market climbed by 31.4% in the first 10 months of 2007, according to the National Bureau of Statistics - this amounts to about USD 259 billion. Despite some obstacles, many investors are finding the potential here is very inspiring.
5) China’s Ever-Growing Tourism Industry is Very Appealing
Interest in touring the Orient has appealed to Westerners for centuries and the draws of China continue to be incredibly strong. With a huge 6.2% of the world’s market share for tourism demand, China commands a holidaymaking industry that is worth an awesome USD 439.8 billion for 2007 alone. Demand here is anticipated to grow by 9.6% per annum through to 2017, according to the World Travel & Tourism Council – this figure is massively above the global norm. Whilst catering directly to the holidaymaking crowd through buy-to-let strategies is difficult, the extreme interest in China does inspire investor confidence. With a strong and growing property market, foreign investors are finding it is still possible to buy directly for resale and to cash in via ownership in development corporations directly or simply through stock purchases.
6) China’s Unique Geography and Climate Diversity Help it Appeal to Holidaymakers, Expats and Investors
China is a vast country with diversity in both geography and climate. The country’s landscape includes mountains, plateaus, rivers, plains and other distinct features. It borders the Yellow and East China seas and the Pacific Ocean with extensive coastlines. The climate ranges from extremely seasonal in the north, with arctic winter temperatures, to subtropical in the south. The diversity appeals to holidaymakers, expats and investors with different ideas of “perfection.” China’s geography and climate offer something for just about every taste imaginable.
7) China’s Exotic Sights Appeal to Holidaymakers, Expats, Retirees and Investors as well
From the Great Wall and the Silk Road to the Forbidden City and the legendary Yellow River, the landmarks of China are exotic and appealing. The unusual sights found in this cradle of civilisation have long captivated holidaymakers, expats, retirees and investors and they continue to do so. Whilst direct buy-to-let strategies are difficult to maintain under regulations, investors are finding real estate stock investment and resale potential continue to grow thanks to the unusual draws China offers.
8) Cost of Living Can Fit Many Budgets, making Property in China Appeal to Many
The cost of living in China runs a rather wide range. Expats who choose to live by Western standards can expect to pay Western prices. The bigger cities do command higher prices, as well. However, it is possible to stretch income by doing things more like the locals. When non-imported goods are used to meet most needs and the standard of living is modest, expats find their money can spend incredibly well. The ability to have what many see as the best of both worlds appeals to expats and investors.
9) The Present and Growing Expat Community Helps make China Property Appeal
China has long appealed to foreigners in search of adventure. Even now, an estimated 30,000 Brits alone live in this country. More foreigners are coming in all the time to take teaching posts and other crucial positions. The existing and growing expat community does help make holidaymakers, expats and investors feel more at home in this land of mystery and wonder.
10) Favourable Exchange Rates are Very Appealing to Investors, as are Reasonable Chinese Real Estate Buy-In Prices
The exchange rates between the British pound and the Chinese renminbi are very encouraging for Western investors. With a single pound worth about 15 renminbi, many Brits find their money spends quite well in China. Whilst living, buying and touring by Western standards can cost a fair amount, doing things like the locals do can really stretch a pound. The exchange rates encourage investment and tourism. The buy-in prices for property in China also appeal. It is possible to purchase two-bedroom, two-sitting room flats for under GBP 90,000 in high-end areas for example. Buying Chinese property is a little tricky, but most investors are encouraged by the potential resale returns.
Whilst buying property in China isn’t the easiest of prospects, many investors are drawn to this country for its unusual landscape, culture and sights. Investors here are finding good returns on direct buys and even on the purchase of stock in Chinese real estate development companies. This land of mystery has long intrigued the West and it seems the love affair continues.
