The recovering China real estate market: Opportunities for investors?
The Covid-19 pandemic and the US-China trade war have continuously challenged the China’s e economy in general and real estate market in particular. However, this market is now showing many positive signs of recovery. Is this the right time for Vietnamese and other foreign investors to target China real estate?
According to Reuters, home sales in China plummeted right from the beginning of the Covid-19 pandemic because of the country's economic closure to prevent the spread of the virus. Along with that, the prolonged trade war with the US has created a shift of supply chains from China: many international manufacturers, businesses and investors have reclocated their operations out of the country, putting bad impacts on the local real estate market.
Specifically, foreign capital flows into the China real estate market in the first half of 2020 only reached 27.1 billion yuan, or 4.52 billion yuan per month on average, down from 6.76 billion yuan in 2019 and 8 billion yuan in 2018. Tensions between China and the US have really hurt the market sentiment, especially foreign investors’ confidence. Many international investors expressed concern about political instability and risks from capital inflows into the China market.
However, China real estate market still has shown an unexpected adaptation and recovery. After the economy reopened, official statistics showed that both real estate sales and investment in China surged in May. Specifically, according to Reuters, investment in China real estate increased 8.1% over the same period last year. Real estate sales by floor area rose by 9.7% in May, a significant improvement compared to the 2.1% decline in April. Capital raised by Chinese real estate developers in Jan-May dropped only 6.1% year-on-year, in comparison with a decline of 10.4% in Jan-Apr.
Specially, the average new home prices in 70 major cities of China in May increased 0.5% month-on-month and 4.9% year-con-year. Home sales have surpassed pre-Covid-19 levels in almost half of the 28 cities. Notably, home sales at 16 real estate developers tracked by Bloomberg Intelligence rose by an average of 13% compared to June 2019.
What did Chinese real estate businesses do to recover from the pandemic respond to the shifting wave of foreign investors under the impact of the US-China trade war? Is the real estate market in China still really attractive now? To answer these questions, Batdongsan.com.vn continues to conduct an online seminar, Adapt 2 Change, with the topic "Expanding business opportunities with foreign partners: Tips from real estate experts" in the Hong Kong and China markets.
The seminar will welcome speakers:
- Mr. Winston Lee - Project Director of Propertyguru Group
- Mr. Eli Mcgeever - Deputy General Director of Soho App
Last month, the first online seminar of Adapt 2 Change series with the topic "Experience of US real estate brokers in pandemic" took place successfully with more than 30,000 customers watching. At the second seminar that will be held on October 28, Batdongsan.com.vn will provide an objective and detailed view of developments, opportunities and ways to approach the potential real estate market in many major cities of China. The event also helps to create a connection between Vietnamese investors and professional brokers in Hong Kong and China.
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