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Sign up with Google Sign up with FacebookQ: Is there any point investing in Chinese property at the moment?
I calculated that renting my flat for the next 40 years on my current rent rate still works out cheaper than buying the property. House prices are just ridiculous here, especially in Beijing, yet so many Chinese are still eager to buy. Are they making a foolish mistake? Or am I the fool for not considering the buying option?
The way you look at it it may seem foolish, but stop and think outside the box for a second. Think that after renting for 40 years, you have nothing to show for your payments of rent. If you buy, you will have whatever the property value will be.
Also consider the way the real estate market appreciates in value. It is common here for a property to double in price in a 5 years spam, unless the "bubble" burst. Five or 6 years ago, the apartment I live in sold new for 450,000 Rmb, today you can not touch it for less than 1.3 to 1.5 million Rmb.
I would seriously recommend that if you have the money, do buy one as an investment, and use it to live on.
When you invest in a property is not only for your own use, but also because in the long term, the investment you've done will increase the original value and that added-value will be fairly appreciated when you're getting old.
As for investing in China, it's true that many Chinese looks at buying a flat rather than renting, because they only consider the investment aspect of their purchase rather than the living one.
Moreover, Chinese properties gain value very fast, even if the compound is deteriorating....
The only negative aspect with investing in China rather than for instance in Europe is the quality of the infrastructure and the period of deterioration of a flat or the building itself : a German construction is built to last around 70 years, a Chinese one is built to resist around 20-25 years.....
For me, I would only consider buying a property in Europe.
With the real estate market in China continuing to thrive, it is no wonder why more and more foreign individuals and companies are looking to invest in property here. As a result, the Chinese authorities have set out various regulations to be taken into consideration in order to ensure the healthy development of the property market. Foreign individuals must possess a one year work visa and they are only allowed to purchase one unit of residential property each. A foreign company is only allowed to purchase commercial property for office purposes, and the property must be situated in the location of the company’s registered branch or representative office. Our experienced lawyers will carefully guide you through all the formalities, helping you to sidestep any restrictions to leave you with the best result to meet your individual or business needs.
Many foreigners find the process of purchasing property in China an extremely daunting one and as a result they purchase property in the names of Chinese citizens. The foreign individual then becomes the real owner of the property and the Chinese citizen becomes the apparent owner. These kinds of relationships inevitably give rise to very unpleasant disputes in the long-term.
However, by registering a Wholly Foreign Owned Enterprise (WFOE) in China can a foreign individual and foreign company obtain direct and total access to Chinese real estate market. The newly set up company is treated as a Chinese legal entity and therefore free to purchase all kinds of properties in the name of the company. As the owner you will receive a Chinese (Z) Work Visa valid for 2 years which will allow you to purchase residential property. Establishing your business as a WFOE requires a minimum registered capital amount of RMB 100,000 which will give you full control over your company. If you have any inquiries on this issue, please search jay and shaw to get your answers.