Bright Business Consulting LLP

Friday, September 21, 2018

Real Estate Properties in China

Considering the Chinese real estate market you are immediately made aware of how a so large Country is a real and concrete investment opportunity for foreign investors.

Despite the financial and global real estate crisis has also affected China, leading to a decrease in sales, the real estate investment in China continues to have a large growth potential. The urbanization has resulted that in twenty years 50% of the population lives in cities and it is expected that the proportion increases to 70% at the end of 2014. The reason is to be found in two areas: the overall economic growth of the Country that continues to be the fastest one around the world and the state policy of China which is always favorable to foreign investment in its territory. To these two important factors you can add the easy granting of loans at subsidized interest rates and without excessive guarantees.

The monitoring system of China's real estate reported that the average cost of new residential buildings in about 100 (one hundred) Chinese cities during the month of December 2013 compared to the year 2012 has grown by about 12%. In 2013, China was ranked among the top places in the world rankings as the best real estate investments. Sales of residential properties increased by approximately 33% in 2013. In many Chinese cities, despite the attempt of the central Government to freeze the prices of real estate sales, these increases have reached 16%. The same is expected to happen also in 2014. Consequently, the Chinese real estate market can only represent an interesting source of investment.

According to the latest statistics released by the central Government, the real estate industry in China plays a vital role, constitutes more than 10% of the Chinese economy and continues to record a strong presence of foreign capital in the field of:

  • Luxury Residential Real Estate Investments.
  • Economic Residential Real Estate Investments.

Even if the latter model, currently represents a very small slice of foreign investment, recent directives of the central government encourage this second category of investments so that the new Laws on building require manufacturers to use 70 % of building land to construction of economic residential complexes.

According to observers, some institutional investors are in the process of diversification, therefore directing real estate investments to the logistics sector, now more profitable than the residential one. The rental areas in logistics facilities in the last decade have seen an average increase of between 5% and 10% on an annual basis. The new plan of the central Government sets out to improve the efficiency of logistics and transport, boosting the development of new projects through real estates that have a low environmental impact, and specific measures for dangerous goods.

Bright Business Consulting LLP through the strong relationships that exist in the Country is able to select and propose solutions to suit every need of investment.

The central Government has introduced some rules (Opinions) that govern foreign investment in China in real estate sector. The purpose of Opinions is to cool the real estate market that is currently in the condition of "overheating" having a significant impact on foreign investors who wish to speculate on the real estate market. The rules apply to both individual and institutional investors. As a result of the promulgation of the Opinions, the purchase of real estate properties by foreign persons is subject to restrictions that may vary depending on the use of the same:

  • Residential use: allowed to foreign entities with branches or representative offices approved by China, by foreign persons who have worked or studied in China for over a year, by overseas Chinese and residents of Hong Kong, Macao and Taiwan who buy real estate properties of important sizes.
  • Commercial use: allowed to foreign entities that make up a foreign-owned company (Wholly Foreign Owned Enterprise - WFOE) in order to retain ownership of the real estate properties in China.

There is also the fact that some local Governments have enacted ad hoc laws and regulations for the mortgage procedures in the real estate market. The skills and knowledge of Bright Business Consulting LLP together with many other elements allow everyone (physical individuals and/or legal entities) to be able to enter the housing market with appropriate "Warranty & Assistance".

The Chinese real estate market is still poorly documented. The People's Republic of China has only recently entered the protection of private property among the fundamental principles of the Constitution.

Investors and private people have usually difficulties in acquiring definite and clear information on the process of buying and selling real estate. Given that the "players" in the housing market are not always in good faith and in the less popular regions there are common frauds relating to land registration of real estate properties, Bright Business Consulting LLP is able to ensure the customers:

  • The origin of the real estate property.
  • Full assistance in every aspect of the transaction, technical, legal and bureaucratic.
  • The high growth potential of the investment.

Given that Bright Business Consulting LLP does not work in the field of "Real Estate Properties" in the first person, but it is rather involved in this sector through consolidated and calcified synergies in the "PEE Project", useful to the accompaniment of the companies interested in this market. However, in this scenario the analysis through a "Consulting for Company Investigations & Commercial Information" is a right suggestion, especially for those businesses that want to operate in the field of "Real Estate Properties".

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