China Guide

China Property | Buying Chinese Real Estate – Hong Kong to Shanghai

China Property

The economic growth found in China is phenomenal with many choosing to invest in this fast growing country. Pursuing these opportunities can be a great investment if you are in the international property market and have some disposable income to play with. Whether you are looking to relocate or buy a rental property, China has a lot to offer.

There have been many cases where foreigners live in China for long vacations then plunge into buying a permanent residence. This has been made easier with changes to the Property Law and easing of government policy for foreign investment. Now many look to Asia for creating a property investment.

However like in most things that sound too good to be true, they usually are. While good prices and promises of a good return on investment make the Chinese market look attractive to property investors, it is the kinks and crannies in the process and resulting challenges that can make buying Chinese property a test to even the most experienced investors.

Here is a quick guide to things you should know before you plunge into buying property in China:

* You cannot privately own land in China. You are effectively renting from the Government meaning you only ‘own’ your four walls and not the land it sits on. You are automatically linked to a 70 year lease with the Government.

* You have to be “on the ball” as they say when chasing property in China as the fast passed transactions make the market that much more competitive. This is largely to do with the fact that most Chinese pay in cash rather than through mortgages making the process much more efficient.

* Make sure you have a thorough understanding of the policies surrounding visas and residency in China if you plan to live in your Chinese property as even a Chinese spouse doesn’t guarantee you permanent residence.

* Physically ‘buying’ your international property can also present problems with current predicaments including the difficulties in obtaining loans in China while they have restrictions on the amount you can exchange into local currency. Currently about US$50,000 per year is allowed, not nearly enough for a house.

* While real estate agents can be a useful resource, many use foreigners as easy targets for charging extra fees. You will need to use the services of a lawyer already so agents can tip your budget.

* When searching for the perfect house or property, be sure to fully inspect the location and the possibilities of future developments nearby so as not to end up with a property right next to a steel mill.

So getting some good advice before making the plunge with certainly pay off, even talking to previous investors will give you a heads up on what to expect and pitfalls you need to miss.