about chinese real estate

[cosmiclobster]

When we were in Sanya they were building a 2nd and 3rd high rise condo building 1/2 block from the beach (as phase 2 and 3 of an existing project). For a 1000 sq.ft. 2 bedroom 2 bath condo on a high floor facing the sea, with a large balcony the price was about $60,000.

[Guest blsqueaky]

When we were in Sanya they were building a 2nd and 3rd high rise condo building 1/2 block from the beach (as phase 2 and 3 of an existing project). For a 1000 sq.ft. 2 bedroom 2 bath condo on a high floor facing the sea, with a large balcony the price was about $60,000.

Steve, this sounds very reasonable. You just have to see what the family sent me, floor plans and all, but still can not get over the price. Last year vs this year.

 

one of them is facing the lake

[yuehan123]

Beware the recently imposed and sure to change laws and taxes regarding real estate "speculation" intended to curb the rising prices.

[ptcrusier333rph]

being too careful can just be as bad as leaping in with both feet.

 

if you know what you want and think the price is resonable then buy it, even if it dropped you still figure it was reasonable when you bought it. beside real estate is long term, did you want it as a investment or a home depend on your view if it a investment you worry about the cost if it a home you not too worry about the price.

 

former real estate agent

Robert

[Larry & Meirong]

I am amazed at how I just have to keep on learning about China and it's ways. My wife and I were talking about our home in China recently, and she said "you know that we can only own it for 70 years don't you?"

 

I have always been proud of the fact that we own a fully paid for home with no yearly property taxes. Now I find out that the ownership expires in 70 years. It looks like you, or whoever you sell it to can only live there/own it for 70 years. If you own it for 30 years and sell it, then you are selling the remainder of the 70 year period-in this example-40 years.

 

Sure does add another dimension to the situation.

[tonyontherock]

Just closed my first deal (one I took the lead) in China (over 100 million U.S.) in Beijing. I can point to the best office building in BJ and say, in a year when it is up, ya, I did that deal. It feels great! It does not look like the Westin on 42nd and 8th street at all ( the 2002 uglist building in the U.S., I was a member of the team).

[Dan R]

Sounds fascinating Tony. Are there any artist concept pictures you could put up? Can you get me a nice office space cheap?

[tonyontherock]

Dan, the building just started construction and will top off by the end of the year. The rent is budgeted at $27 U.S per square meter, but near by building across the street (which is a much lower grade one) already shot beyong that. I anticipate it would be in the range of 35 to 40 U.S. per square meter/month. Unfortunately, that building is being leased out by the floor. If you are really interested in setting up shop in Beijing, PM me and I will see if there is anything in the developer other buildings.

There is a restaurant section in the area being built with budgeted rent of US.35 to 40 /square meter. There are three super five star hotels, banks and international financial institutions in the 4 block area. It would be a gold mine. After several months of ponding on the table, arguing and well, bitching about each and every clause, I have become friends with the developer's sales and management. Unfortunately I can't do anything because of conflict of interest. Initially I was going to try get a lease once the deal is over and actually sent my finace over to start talks. But as soon as the first deal is over, the client is doing two more deals with them and the developer also is considering hiring us to set up financing structure for their projects outside of Beijing. A ton of conflict. The agony of being a transactional lawyer is to see opportunities and other people making a ton of money.

[BuffaloPaul]

When we were in Sanya they were building a 2nd and 3rd high rise condo building 1/2 block from the beach (as phase 2 and 3 of an existing project). For a 1000 sq.ft. 2 bedroom 2 bath condo on a high floor facing the sea, with a large balcony the price was about $60,000.

Yeah, I was there in Feb and Jenny and I seriously considered buying one of these. It was a tenth floor with great views. Unfortunately, they wanted the cash in 7 days and we didn't know how to swing it.

[rogerluli]

But I know the price of real estate is very high in china.Chinese expert of real estate say the  foam of  chinese real estate has been in china.After 3 0r 5 years,the price will be down.I don't why your wife suggest you buy real estate in china now.

 

I remember my husband had this idea.I stopped him.

Let me add this AP piece in warning...

 

"REAL ESTATE LENDING THREATENS CHINA BANKS

 

Soaring lending for real estate deals poses a serious risk for China's already debt-swamped banks, the country's banking watchdog says. The warning comes amid a series of government measures to curb speculative real estate investments. Real estate loans were the fourth-largest category of non-performing loans at state-owned banks in 2004, according to the China Banking Regulatory Commission."

 

When the bubble bursts many will get soaked (ancient Chinese proverb)...

[tonyontherock]

Real estate lending by banks is always a problem. It is casued by the government. ABS (asset backed securities) is the solution. China can easily get some bonds sold backed by mortgages. There are so few investment products on the market now.

[Yuanyang]

This is one of those things you can never know about... like buying cheap real estate in NYC during the 70's. Who would've thought of a come back?

Likewise we've all seen inflated prices continue to inflate (SF/Bay area housing).

 

I may buy for my own means (for a place to retire) and at whatever price I'm comfortable. Pay for it and let the living sort it out.

[rogerluli]

This is one of those things you can never know about... like buying cheap real estate in NYC during the 70's.  Who would've thought of a come back?

Likewise we've all seen inflated prices continue to inflate (SF/Bay area housing).

 

I may buy for my own means (for a place to retire) and at whatever price I'm comfortable.  Pay for it and let the living sort it out.

I agree with you completely on this one Bob. If it's for your own home then I would and will buy whenever we are ready and hang the market. If you are looking for an investment and everyone says that Chinese real estate will only go up, up and away, I would say look out below...

 

The other kicker is of course the exchange rate. Everyone expects that the Yuan will have to eventually climb in value against the dollar making our money less valuable. How much and when this will start to occur...

[tonyontherock]

Here is how I look at the market trends.

In the short term, say about 2 -3 years or so the market will go down. It already started to show signs in some locations. In the longer term, it will be up. Simply because there is not sufficient supply compared to the population and the short term tightening of credit reduces supply a bit further.

The currency will adjust about 5 to 10% in about one year. That is what I believe the market, at least the private equity funds are betting. They could be completely wrong, and if they are right, the timing may be a bit later. E.g. Morgan and others went into the Japan market three to four years ago, the market just improved after 13 years of no action.

[skibum]

Something else to think about when buying RE in China. My wife just told me about a place between Suzhou and Shanghai where new apts were built. Many professors from a nearby college lived there and one time a teacher happened to take a gieger counter home and found that there were high levels of radiation. It seems the building was built on a dump site for a factory. Other teachers confirmed the readings and they decided to sell their homes. The govt which built the buildings would not allow them to mention the problem to buyers.