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China in 2016: A market to watch


The land of the dragon has been the subject of much debate in recent months, both in terms of the local property market and what the significant population can offer real estate markets in other parts of the globe. Certainly, while economic troubles may be on the horizon for the massive country, there's no avoiding the fact that China will continue to play a critical role in property across the globe - from the UK down to Australia.

This year, China is a market to watch.

In an International Monetary Fund paper, Understanding Residential Real Estate in China, the organisation explained that an orderly adjustment of the real estate sector is now something that's welcome thanks to overbuilding and a subsequent softening of the market.

This year, China is a market to watch, and here are a few of the reasons why it's important to do so. Global property investors will want to take note.

Chinese citizens are heading overseas

According to Juwai, 120 million Chinese travelled out of China last year. They're not just heading to local destinations, either. Chinese citizens are flying to the US, Europe, Australia and New Zealand. Unsurprisingly, there are also significant impacts on the property market.

Juwai explained that from massive, expensive trophy homes right down to affordable condominiums, Chinese property buyers are now the fastest-growing segment of the market. In fact, they racked up over US$7.2 billion in sales in 2009, climbing to US$37 billion in 2013. It's a figure that's unlikely to slow.

For investors, it's going to be a good idea to start thinking like some of the biggest retail chains in China. Instead of buying land and properties in the country itself, start looking overseas to where these buyers might be heading.

China could retain its title as the largest source of students heading overseas for study.

Working through a buildup of unsold housing

China has become synonymous with the idea of massive, newly-constructed cities that are effectively lying empty. What's more, there are massive stretches of highway void of the rush hour traffic common in many parts of the globe. It's housing that's the focus here, however, as the Wall Street Journal expects efforts from Beijing to reduce housing inventory in the country.

Citing an announcement from President Xi Jinping back in November where he said the country needed to resolve inventory problems, the Journal explained that developers are now planning on building in a small number of Chinese cities. What's more, these would solely be cities with healthy supply-and-demand numbers.

Considering overseas education

Interestingly, Juwai noted that China could retain its title as the largest source of students heading overseas for study this year. The organisation explained that top-end position demand is highly competitive in China and there's a real pull toward Western education.

Juwai explained that around 460,000 mainland Chinese students headed overseas for study in 2014, representing an 11 per cent year-over-year increase from 2013.

While many students are likely going to be living within the educational facilities themselves, a number more could opt for housing in the surrounding cities. This is where there's a clear opportunity for those in the property market.

There's no avoiding the fact that China will continue to have a presence on the global property market over the course of 2016. For those planning to proceed with property development plans, it's going to be crucial to be aware of the biggest changes in this massive country.

Property in China continues to evolve.Property in China continues to evolve.

Date Published: 02 Mar 2016
Category: General News

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