Beijing Residential: Why a good investment?

[GreenMonkey]

Apologies for the last message I posted...deemed too commercial by the site moderators. Anyway, I've been kept in check and here goes another post, this time to describe WHY Beijing is such a good investment at this time.

2008 Olympic Games - History has shown that the arrival of the Olympic Games usually brings significant capital-gains to real estate in the host city in particular. This is to a large part because infrastructure, technology and environment are usually upgraded in that city in the run up to the games. Barcelona grew 150% (from a lowish base) up to the games and Sydney outstripped other Australian cities by 11% up to the games. Cities/countries that are developing and present a lower base price for real estate grow the most. Sydney didn't grow as much as Barcelona, because Sydney was already fairly expensive. Likewise, when London 2012 comes around, the real estate in that city won't grow too fast...because it is already quite saturated. With Beijing 2008, you have a developing economic superpower, a low price base for real estate (still a fraction of Hong Kong prices) and a country that is already in the midst of a broad business-cycle boom. Barcelona actually declined post-games because that economy was in a depression before the games - and when the games had finished, the economy merely returned to its usual cycle. Beijing has all the factors there that indicate huge growth potential. I feel giddy sometimes thinking about it. Fairly recently in Shanghai, I knew people that had made 100% on investment in 6 months. Growth like that, you have to admit, is a bit precarious...but it isn't impossible when you've got 200 countries all trying to get a slice of China, as well as 300 MILLION people internally moving from the countryside to the cities. Beijing is also seeing this kind of growth, and we should see more of it, especially in the lead up to the games in August of 2008.

The government's commitment to the reform and flexibility of it's currency the RMB or Yuan, means that the currency estimated to be undervalued by as much as 50%, is likely to climb over the coming years. Couple that with a presently high Australian and New Zealand dollar and the likelyhood of an imminent drop, and you have a potential currency double-whammy.

Well, I best get back to selling my Beijing stock down-under.

All the best,

GreenMonkey

p.s. Any queries about Beijing/China residential investment just ask here or send PM and I'll be happy to respond.

[The Y-man]

Apologies for the last message I posted...deemed too commercial by the site moderators. Anyway, I've been kept in check and here goes another post, this time to describe WHY Beijing is such a good investment at this time.

2008 Olympic Games - History has shown that the arrival of the Olympic Games usually brings significant capital-gains to real estate in the host city in particular. This is to a large part because infrastructure, technology and environment are usually upgraded in that city in the run up to the games. Barcelona grew 150% (from a lowish base) up to the games and Sydney outstripped other Australian cities by 11% up to the games. Cities/countries that are developing and present a lower base price for real estate grow the most. Sydney didn't grow as much as Barcelona, because Sydney was already fairly expensive. Likewise, when London 2012 comes around, the real estate in that city won't grow too fast...because it is already quite saturated. With Beijing 2008, you have a developing economic superpower, a low price base for real estate (still a fraction of Hong Kong prices) and a country that is already in the midst of a broad business-cycle boom. Barcelona actually declined post-games because that economy was in a depression before the games - and when the games had finished, the economy merely returned to its usual cycle. Beijing has all the factors there that indicate huge growth potential. I feel giddy sometimes thinking about it. Fairly recently in Shanghai, I knew people that had made 100% on investment in 6 months. Growth like that, you have to admit, is a bit precarious...but it isn't impossible when you've got 200 countries all trying to get a slice of China, as well as 300 MILLION people internally moving from the countryside to the cities. Beijing is also seeing this kind of growth, and we should see more of it, especially in the lead up to the games in August of 2008.

The government's commitment to the reform and flexibility of it's currency the RMB or Yuan, means that the currency estimated to be undervalued by as much as 50%, is likely to climb over the coming years. Couple that with a presently high Australian and New Zealand dollar and the likelyhood of an imminent drop, and you have a potential currency double-whammy.

Well, I best get back to selling my Beijing stock down-under.

All the best,

GreenMonkey

p.s. Any queries about Beijing/China residential investment just ask here or send PM and I'll be happy to respond.


Hi Greenmonkey,

Some questions pop to mind:

Are these your opinions only?
Do you own property in Beijing?
What are the sources of your "facts"?
What financial interests do you have in selling propoerties in Beijing (if any)
What are the risks and down sides associated with investing in Beijing

Without these, your post will I suspect be once again consigned to the trash can as unsolicited advertisement....

Cheers,

The Y-man

[adrian_see]

Greenmonkey,

What happened to all your investments in Zhuhai?
A few months ago you couldn't see any better place to invest than Zhuhai.

[GreenMonkey]

Some questions pop to mind:

Are these your opinions only?

MY OPINIONS ONLY? FORMULATED BY ME? YES. DO OTHER PEOPLE SHARE THESE OPINIONS? YES, PROBABLY SOME PEOPLE. ONE JUST NEEDS TO ANALYSE THE INVESTMENT.

Do you own property in Beijing?

TO DATE, NO I DON'T OWN BEIJING PROPERTY, THOUGH I AM CONSIDERING IT, AND ALSO DEPENDING ON MY OWN FINANCES.

What are the sources of your "facts"?

SOME FACTS ARE QUOTED FROM JONES LANG LASALLE REPORTS I HAVE READ ABOUT THE EFFECT OF THE OLYMPIC GAMES ON REAL ESTATE MARKETS...ENTITLED "REACHING BEYOND THE GOLD: THE IMPACT OF THE OLYMPIC GAMES ON REAL ESTATE MARKETS", OTHERS ARE FROM FACTS I'VE PICKED UP OVER THE VAST AMOUNT OF MATERIAL I HAVE READ ABOUT CHINA. I'VE SPENT ALMOST THREE YEARS LIVING IN CHINA OVER THE PAST SEVEN YEARS AND SPEAK THE LINGO.

What financial interests do you have in selling propoerties in Beijing (if any)

I EARN COMMISSIONS FROM PROPERTY I SELL IN BEIJING

What are the risks and down sides associated with investing in Beijing

NUMEROUS. POLITICAL INSTABILITY, ANOTHER TIANAMEN SQUARE, WAR WITH TAIWAN, ECONOMIC COLLAPSE, SARS OUTBREAK, REGULATORY HURDLES, FRAGILE LEGAL SYSTEM, BANKING COLLAPSE. RELATIVE TO AUSTRALIA OR NEW ZEALAND, INVESTING IN BEIJING/CHINA CONTAINS A HIGH LEVEL OF RISK. BUT THE RETURNS ARE GREATER OF COURSE, AS THE OLD SAYING GOES, HIGH RISK = HIGH RETURN.

Without these, your post will I suspect be once again consigned to the trash can as unsolicited advertisement....

IT'S UP TO YOU WHAT CONTENT YOU DEEM TO BE ADVERTISING. IF YOU CONSIDER MY POSTS ADVERTISING, I APOLOGIZE AND WILL CHANGE MY POSTS ACCORDINGLY. HOWEVER, EVEN IF I DO HAVE SOME VESTED INTERESTS IN BEIJING PROPERTY, DOESN'T EVERYONE HERE HAVE SOME SORT OF VESTED INTERESTS WHEN THEY MAKE POSTS HERE? I WOULD FIND IT HARD TO BELIEVE OTHERWISE.

ADRIAN, I STILL RECOMMEND ZHUHAI, THERE IS NOTHING WRONG WITH THAT INVESTMENT LOCATION. I HAVE SIMPLY BEEN DOING A HUGE AMOUNT OF RESEARCH ON BEIJING PROPERTY OVER THE LAST WEEKS BECAUSE OF MY NEW POSITION, AND THOUGHT I WOULD SHARE SOME OF THE IDEAS I AM GATHERING. I WASN'T ABLE TO CONTINUE THE ZHUHAI DIALOGUE BECAUSE OF EVENTS IN MY LIFE SUCH AS GETTING MARRIED, MOVING COUNTRY AND STARTING A NEW JOB. APOLOGIES IF THIS HAS CONFUSED YOU.

IF IT HELPS, I WILL ADD A DISCLAIMER AT THE FOOT OF ANY FUTURE CHINA-RELATED POSTS THAT STATES THAT I AM A SELLER OF BEIJING PROPERTY.

BEST,

GREENMONKEY

[harpeau]

Hi Greenmonkey

is there any particluar area of Beijing or type of property which you think a property investor should focus on? also are you able to get bank loan at a Chinese bank as a foreigner. (usually the only banks you can get loan from is limited to those banks which the real estate company doing the project has made a special arrangment with. and those banks usually dont lend to foreigners?) I think Bank of China does a lend but if they are not direclty involved in the project then they wont lend anyways.

also, I know how property values have been going up, but this increase can only be realized upon sale. I'm not so confident that rise in value can be realized in 2nd hand house sale.

your views and idea much appreciated
thanks

[Les]

Green Monkey,

IF IT HELPS, I WILL ADD A DISCLAIMER AT THE FOOT OF ANY FUTURE CHINA-RELATED POSTS THAT STATES THAT I AM A SELLER OF BEIJING PROPERTY.
This is usual where someone has "an interest" in what they propose. So, yes, please do so. In fact, why not make it part of your normal "sig" ? (i.e. not ONLY on Beijing-related posts...)

Regards,

PS And please avoid using Capitals - or bold - for whole sentences. These are deemed to be "shouting" on most forums. I suspect you used this method to differentiate your answer from the question - but there are better ways (use "Quote", or preface your responses with "GreenMonkey>> " or use a different colour). But please don't shout unless emphasis is desired (usually only a few words of a sentence).

[GreenMonkey]

Hi Greenmonkey

is there any particluar area of Beijing or type of property which you think a property investor should focus on?

***I would say focus on where I am selling straight off the bat, but that would be deemed too biased.

In terms of high-end property receiving high-yields from strong rental demand, one should look towards the north-east of Beijing around Chaoyang Park. Most of Beijing's expat community (high-renters) live in this area and most of the embassies are located around here. Sanyuan Bridge area, which is located close to the more established Chaoyang expat housing area looks promising because it is cheaper and has excellent future potential.***

Also are you able to get bank loan at a Chinese bank as a foreigner. (usually the only banks you can get loan from is limited to those banks which the real estate company doing the project has made a special arrangment with. and those banks usually dont lend to foreigners?) I think Bank of China does a lend but if they are not direclty involved in the project then they wont lend anyways.

***China must have changed since you've been there. HSBC does Beijing mortgages for overseas foreign investors...there are not many restraints. You don't even have to go to China.***

also, I know how property values have been going up, but this increase can only be realized upon sale. I'm not so confident that rise in value can be realized in 2nd hand house sale.

***That's a good point. Especially because of the nature of Chinese society at present, Chinese people demand new housing...they don't like the idea that someone else has "dirtied" their home (a result of wanting to rid themselves as quickly as possible of their "farmer" or "peasant" image). There is huge demand for new property, with demand only being huge again nearer the other end (lower-end) of the scale for second-hand property. However, if a property has shown a strong rental demand for some time and doesn't show signs of letting up, then there needn't be a problem with selling a property "second-hand" to another investor. As for selling to a family who intends to live in the home, that may be another story.***

your views and idea much appreciated
thanks

***No problem, and welcome to the board!***

[grossreal]

hi all
Thats my wallet.
I have a couple of business associates if you could call them that very loosely the are here in sydney and they work here and tianjan and are doing a very large land developing in there and have told me the price changes there but the problem is that we work under a west business code and they work under a oriental business code and they are quite different.
I have but I no longer do trade via austrade in southern china but I don't think I would purchase anything in china unless it was a joint venture were the person in china put up 50% of the cash.
It work on a honour basis there but it also doesn't have any problem with people being given cash to get thing approved but that approval can be recinded at any time.
so thanks very much GreenMonkey for the information and if you can tell goran that I have the same opinion to investing in moscow they rob you at gun point there but there are some very good investments there also not sure if you will live to enjoy them.
as for demand
most of tianjan property and beijing will be the same is organise by a dept
the dept farms it out to a developer (the owner of that company is usually the old boss of the dept giving the contract)
The developer gets a large corporation deutch bank or such to finance the project and then it is divided from there.
problem is you need foot soldiers you know on the ground to make sure your investment is save and that costs.
and I don't think they have a second hand market.

[Kennethkohsg]

[QUOTE=Les]Green Monkey,


This is usual where someone has "an interest" in what they propose. So, yes, please do so. In fact, why not make it part of your normal "sig" ? (i.e. not ONLY on Beijing-related posts...)

Regards,
*********************************
Dear GreenMonkey,

1. I agree with Les' views about including a disclaimer in your post to openly warn your readers beforehand, as you are marketing these properties yourself. In this way, members will find you and your posts to be more credible.

2. For your kind update and due considerations,please

3. Thank you.

regards,
Kenneth KOH

[Kennethkohsg]

What are the sources of your "facts"?

SOME FACTS ARE QUOTED FROM JONES LANG LASALLE REPORTS I HAVE READ ABOUT THE EFFECT OF THE OLYMPIC GAMES ON REAL ESTATE MARKETS...ENTITLED "REACHING BEYOND THE GOLD: THE IMPACT OF THE OLYMPIC GAMES ON REAL ESTATE MARKETS",


***************************************************
Dear Green-Monkey,

Care to openly post and share the report by Jones Lang Lasalle with us here?

Alternatively, can I humbly ask for a copy of report in private to be separately sent to me at kennethkohsg@yahoo.com.sg.

Thank you.

regards,
Kenneth KOH

[Kennethkohsg]

Dear Green-Monkey,

1. Are the properties truly "freehold" as in the Western society as per properties in Hong Kong?

2. Are foreigners legally and lawfully allowed to own land directly in China? Or do they have to go through a local Chinese to get the right to build only on these lands where these properties are being built upon, as in Thailand and in Vietnam?

3. How can we keep track/know of the actual resale transactions taking place and indepednantly verify the prices of properties sold and re-sold in China?

4. How can property ownership by foerigners, be legally and effectively protected in China under the present Chinese Laws?

5. Looking forward to be educated and learning fromn you again soon.

6. Thank you.

regards,
Kenneth KOH

[Kennethkohsg]

[QUOTE=GreenMonkey
2008 Olympic Games - History has shown that the arrival of the Olympic Games usually brings significant capital-gains to real estate in the host city in particular. This is to a large part because infrastructure, technology and environment are usually upgraded in that city in the run up to the games. Barcelona grew 150% (from a lowish base) up to the games and Sydney outstripped other Australian cities by 11% up to the games. Cities/countries that are developing and present a lower base price for real estate grow the most. Sydney didn't grow as much as Barcelona, because Sydney was already fairly expensive. Likewise, when London 2012 comes around, the real estate in that city won't grow too fast...because it is already quite saturated. With Beijing 2008, you have a developing economic superpower, a low price base for real estate (still a fraction of Hong Kong prices) and a country that is already in the midst of a broad business-cycle boom. Barcelona actually declined post-games because that economy was in a depression before the games - and when the games had finished, the economy merely returned to its usual cycle. Beijing has all the factors there that indicate huge growth potential. I feel giddy sometimes thinking about it. Fairly recently in Shanghai, I knew people that had made 100% on investment in 6 months. Growth like that, you have to admit, is a bit precarious...but it isn't impossible when you've got 200 countries all trying to get a slice of China, as well as 300 MILLION people internally moving from the countryside to the cities. Beijing is also seeing this kind of growth, and we should see more of it, especially in the lead up to the games in August of 2008.



GreenMonkey
[/QUOTE]
********************************************
Dear Green Monkey,

1. I wish to make 4 observations.

2. What is the nature of land ownership in Beijing? Is it truly "freehold" and similar to the property titles in Hong Kong? If not, much of what you said here does not neccessarily apply here as we are actually trying to compare 2 totally entire different system of land ownership and its driving force and operations, namely freehold permanent land ownership transfer under the free enterprise capitalism vis-a-vis centrally controlled socialist system whereby the land ownership rights will always remain with the Chinese people for generations to come and where only the rights to build on the land is transferable.

3. I presume that you are actually referring to the high end property market. 300 million rural Chinese and 200 countries trying to get a slice of this prized estate? I am a bit cynical over your claim. I am wondering that truly how many of these potential investors can and will be able to actually afford such high end luxurious properties, which you are referring to?

4. I can agree that real estate prices in the game-hosting country can/will generally rise with the hosting of an olympic game, though. That can be easily explained by the huge infrastructural development investments as well as sudden surge in housing demand from overseas investors as a result of media publicity on the games hosting country, and sudden acute shortage of rental/commercial accomodation during the games period, as a result of sudden influx of "tourists" who have come in to participate and support the Olympic Games.

5. I wonder how much the price correction can we expect for the properties in Shanghai which your Govt in China has moved in recently, to curb down the property speculation fever?

6. For your update and further comments, please.

7. Thank you.

regards,
Kenneth KOH

[harpeau]

Hi Greenmonkey

can you tell me are there any other banks apart from HSBC which are willing to lend to foreigners for house purchase?.....and do these banks only lend on very specific house projects only?

are the areas , projects, you mention as being for investment consideration are those going for 15k+ rmb per sqm with high managment fees and high utility fees., or do you know of good investments at lower ne dof market?

how do you view new measures by the government to combat property specualtion and invetsments, such as tax on re-sales and higher deposits for 2nd bank home loan?..(there may be more government disincentives, but not sure of them)

as far as I know, property is on 70-75 year leasehold. commercial property may be on 50 year leasehold

thanks
harpeau

[GreenMonkey]

hi all
Thats my wallet.
I have a couple of business associates if you could call them that very loosely the are here in sydney and they work here and tianjan and are doing a very large land developing in there and have told me the price changes there but the problem is that we work under a west business code and they work under a oriental business code and they are quite different.
I have but I no longer do trade via austrade in southern china but I don't think I would purchase anything in china unless it was a joint venture were the person in china put up 50% of the cash.
It work on a honour basis there but it also doesn't have any problem with people being given cash to get thing approved but that approval can be recinded at any time.
so thanks very much GreenMonkey for the information and if you can tell goran that I have the same opinion to investing in moscow they rob you at gun point there but there are some very good investments there also not sure if you will live to enjoy them.
as for demand
most of tianjan property and beijing will be the same is organise by a dept
the dept farms it out to a developer (the owner of that company is usually the old boss of the dept giving the contract)
The developer gets a large corporation deutch bank or such to finance the project and then it is divided from there.
problem is you need foot soldiers you know on the ground to make sure your investment is save and that costs.
and I don't think they have a second hand market.

If you were to buy property as a business joint-venture in China, you would be subject to a higher tax rate. It is better to buy property as an individual, not as a company.

The points you make carry weight. But just for the record, I deal with one of the largest Beijing developers with listings on the Hong Kong and Singapore stock exchanges. Fuddling around could cost them their "buy" rating by Morgan Stanley, and that's unlikely to happen.

New China property title insurance is coming into existence within the next few weeks. It will ensure that investors/owners of property will retain their ownership of that property in the event of something adverse occuring, such as what you discuss. It will be available in the four main centres - Beijing, Shanghai, Guangzhou and Shenzhen. This insurance takes out a significant area of risk in a property market that is only 14 years young.

As I was saying previously, if a property is showing a good steady rental yield, then there isn't any reason why another investor would not buy your property 2nd hand. Most Chinese families look to buy new, that is true, but that's psychology...investors in general are above that, because they look at the figures. It also helps very substantially for rental yields and capital gains to have a premium service company managing a building complex. Rental yields and on-sale opportunities plummet for apartment buildings that have half the management fresh from the countryside (no offence to country bumpkins, as I am one myself). Investors need to pay special attention to WHO is providing management for property developments in China...it is even more important than the quality of the materials used in construction. Look for names such as Jones Lang Lasalle, FPD Savills, CBRE, HW. If you find a good-looking China investment property, but it lacks one of these names, don't invest, as you won't be able to attract the high renters looking for premium service levels.

Have to add a disclaimer here too, as the development I market and sell is managed by JLL.

[GreenMonkey]

***************************************************
Dear Green-Monkey,

Care to openly post and share the report by Jones Lang Lasalle with us here?

Alternatively, can I humbly ask for a copy of report in private to be separately sent to me at kennethkohsg@yahoo.com.sg.

Thank you.

regards,
Kenneth KOH

I can't seem to locate the full document again, but here is an abstract:

Beijing will feel the effects of the 2008 Olympics long after the last medals are awarded, according to Melinda McKay, Vice President of Research for Jones Lang LaSalle and co-author of "Reaching Beyond the Gold: The Impact of the Olympic Games on Real Estate Markets."

The report examines the legacies of four recent Olympic hosts -- Seoul (1988), Barcelona (1992), Atlanta (1996) and Sydney (2000) -- and forecasts the impacts on Athens (2004) and the cities short-listed for 2008.

"The Olympics will have a significant impact on the fabric of the city," said McKay. "Construction of Olympic and transport-related facilities will commence rapidly. Of the planned 37 venues for Olympic events, 22 still require construction. In addition, the city is planning to invest $3.7 billion in its transport infrastructure."

The changes and improvements brought about by the Games will have long-term effects on the real estate markets of the city. "The hotel sector should experience the greatest impact. The Games will result in significant new hotel construction, as well as refurbishments of existing properties. The increase in exposure for the city will also effectively open up the region to the international market. Depending on how effectively Beijing leverages the Games, it could have long-lasting and far-reaching implications for the city's tourism, hotel and convention sector," said McKay.

Other sectors will be similarly affected.

"The office sector should benefit not only from the perceived opening of the economy, but also from the necessary telecommunications improvements required for the Games," said McKay.

COPYRIGHT 2001 Hagedorn Publication
COPYRIGHT 2001 Gale Group

[GreenMonkey]

Dear Green-Monkey,

1. Are the properties truly "freehold" as in the Western society as per properties in Hong Kong?

***no, all land in China is leasehold. I am of the view that this will significantly hold back the values of Chinese property from reaching those attained by HK. There is still value in there however...and the system could change down the line***

2. Are foreigners legally and lawfully allowed to own land directly in China? Or do they have to go through a local Chinese to get the right to build only on these lands where these properties are being built upon, as in Thailand and in Vietnam?

***As far as I know, if you are planning to develop in China, then yes, you need to go into partnership with a local. I am unsure about being able to directly own the land-lease rights, as this is not my area of expertise. I would say roughly yes, that you could, but if you wanted to do any improvements on the land, then you would need a local developer...but you'll have to check up on that one.

However, if you wish to merely buy an established residential property such as an apartment, then yes, foreigners can directly own the assets...no partnership needed.***

3. How can we keep track/know of the actual resale transactions taking place and indepednantly verify the prices of properties sold and re-sold in China?

***Property sales must be registered with the housing authority in China. Tax is paid on the value of the contracts, so there is a record of the amount of all transactions.

Also, land auctions were compulsorily made "public" by Beijing a year or so ago, so back room deals become more redundant. These auctions are open to foreigners to attend, and they are allowed to bid too.***

4. How can property ownership by foerigners, be legally and effectively protected in China under the present Chinese Laws?

***Beijing announced the protection of private property in China around a year or so ago. Enforcement is still an issue, but the general trend is there. Also, as I was saying previously, there is a brand-new insurance product coming out in the next few weeks that will guarantee an investor's ownership of a property and pay for the costs of defending a claim.***

5. Looking forward to be educated and learning from you again soon.

***Hope I've clarified some new developments in the market. Make no mistake, China is still a high-risk investment locale. Good advice goes a long way.***

6. Thank you.

regards,
Kenneth KOH

***My pleasure***

[GreenMonkey]

Dear Green Monkey,

1. I wish to make 4 observations.

2. What is the nature of land ownership in Beijing? Is it truly "freehold" and similar to the property titles in Hong Kong? If not, much of what you said here does not neccessarily apply here as we are actually trying to compare 2 totally entire different system of land ownership and its driving force and operations, namely freehold permanent land ownership transfer under the free enterprise capitalism vis-a-vis centrally controlled socialist system whereby the land ownership rights will always remain with the Chinese people for generations to come and where only the rights to build on the land is transferable.

***Answered previously***

3. I presume that you are actually referring to the high end property market. 300 million rural Chinese and 200 countries trying to get a slice of this prized estate? I am a bit cynical over your claim. I am wondering that truly how many of these potential investors can and will be able to actually afford such high end luxurious properties, which you are referring to?

***Have you even been to China? There are probably more BMWs and Mercedes in Shanghai than there are in the whole of Australia and Singapore combined. There is definitely a market for high-end property as well.***

4. I can agree that real estate prices in the game-hosting country can/will generally rise with the hosting of an olympic game, though. That can be easily explained by the huge infrastructural development investments as well as sudden surge in housing demand from overseas investors as a result of media publicity on the games hosting country, and sudden acute shortage of rental/commercial accomodation during the games period, as a result of sudden influx of "tourists" who have come in to participate and support the Olympic Games.

***Don't forget all the visits to Beijing needed by business people, media, athletes in the lead up to the games. In actual fact, the Olympics is only one factor in a number of factors that makes investment in Beijing attractive.***

***I will make a note too that in my earlier posts in somersoft, my sentiments were based on fundamentals I had observed from actually being on the ground in Shanghai and feeling and touching stuff. I still hold those views. I believe that I also made the point, that some areas and developments would not decrease...particularly those with stellar service levels.***

5. I wonder how much the price correction can we expect for the properties in Shanghai which your Govt in China has moved in recently, to curb down the property speculation fever?

***Shanghai suffered. Beijing resisted. 30% drop in some localities in Pudong District of Shanghai earlier this year. There needs to be caution exercised. However, not all areas need suffer. There are areas where the benefits of investing still outweigh the negatives brought about by government intervention. You're obviously a bear-man Kenneth, helplessly driven by the general sentiment of the market and the press. If there weren't bears like you, maybe there wouldn't be as many opportunities for people like me.***

6. For your update and further comments, please.

7. Thank you.

regards,
Kenneth KOH

***A pleasure***

[GreenMonkey]

Hi Greenmonkey

can you tell me are there any other banks apart from HSBC which are willing to lend to foreigners for house purchase?.....and do these banks only lend on very specific house projects only?

***Yes for the first and yes for the second. Whether other banks can faciliate international investment is another question.

are the areas , projects, you mention as being for investment consideration are those going for 15k+ rmb per sqm with high managment fees and high utility fees., or do you know of good investments at lower ne dof market?

***You'll have steep drop-off in the ability to sell in the 2nd-hand market if you buy into a development that doesn't have high management fees and good service. You'll find the development starts to look run-down only two years after completion, or sometimes even before completion! If you want, you could try Zhuhai as an investment option outside of the major centres. Quite a nice place, very cheap, but will probably need a fair bit of hands-on management to see an investment grow.***

how do you view new measures by the government to combat property specualtion and invetsments, such as tax on re-sales and higher deposits for 2nd bank home loan?..(there may be more government disincentives, but not sure of them)

***The government measures were designed to shake-out excessive speculation in the property market. They ARE NOT designed to shake-out those who are interested in managing the growth of a stable and profitable long-term investment. If you're investing for the long-term, these measures have no effect whatsoever.***

as far as I know, property is on 70-75 year leasehold. commercial property may be on 50 year leasehold

***yes, true...approx***

thanks
harpeau