Chinese Commercial Real Estate Investment to Make Most of Foreign Investments
Real estate investment in China had grown to record-setting levels amounting to $68.5 billion (RMB 463 billion). This is in spite of reports that growth has been stifled from last year, where it has only moved to just 9.5 percent. Mingtiandi reported that year-on-year values have slowed down four times lower than the 40 percent expansion enjoyed in 2017.
The positives have remained, however. Media has blown up the issue more than it's actually been; there has also been a reported surge in sales and economic growth thanks to real estate. In turn, real estate has been fueled by activity from foreign investors, thanks to market prices going down because of prevailing conditions. Domestic investments were also hindered by government policies such as stricter lending rules and tough real estate laws, designed to level the playing field.
While China's regulations have proven to be volatile with the trade dispute joining the mix, it hasn't dampened foreign investors' appetite for Chinese property, to say the least. To prove that point, in 2018, RMB 94.6 billion have found its way to the mainland metropolis last year. 45 percent of all investments in the country were also from foreign investors, especially in China's largest cities.
These investors consist of people from the US with no interest in the ongoing feud between countries. According to The Investor, the majority of these foreign investors consist of US pension funds as well as Sovereign Wealth Funds, which have 'deeper pockets' than most.
Sigrid Zhou of the JLL Capital Markets Research team had said that most of the stocks made available came from mid- to small-sized developers. They have felt the effects of the feud and the slowdown more than anyone; the investments represent a way for them to make back what they lost, and their properties, in turn, make it easier for foreign players to enter the lucrative Chinese property market.
Canadian pension fund CPPIB is the largest non-US investor, with plans to funnel US$817 million into various properties. These are housing programs in tier one and tier two Chinese cities. As for Asian investors, Singapore's GIC partnered with NOVA to create investments in the country's tier one cities.
With some cities remaining as top investment destinations for foreign countries, it looks like China won't have to worry about the US government's punitive efforts to undermine their economy.