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Reasons to Invest in Beijing Property
There are many reasons to invest in Beijing property, including:
Rising International Status: In 1985 Shanghai had just one skyscraper. In 2005 the skyline of this metropolitan city has over 300 skyscrapers, a testament to the development of this market during the past two decades. Beijing’s international status and influence is now on the rise.
With the Olympic Games to be held in Beijing in 2008 the city’s international status and influence is on the rise. While the Olympic Games are an opportunity for competitors to compete on an international stage, they also provide unparalleled opportunities for the host city.
- Investment: In preparation for the Games host nations invest heavily in infrastructure, boosting employment, increasing demand for housing and international exposure of the host city to an audience of millions.
Significant investment is currently taking place in preparation for the Beijing Olympics in 2008. China has already allocated US$40 billion to develop Beijing’s infrastructure and sporting venues in preparation for the Games. By comparison, Australia spent US$1.9 billion and Greece spent US$14 billion.
- Infrastructure: A 300km highway system and 140km rail network are already under construction.
- Local Demand: Urbanisation is fuelling demand for housing in China. Between 1949 and 1979, little housing was added to the Chinese market, while the population grew from 400 million to one billion. Now, with some 10 million Chinese moving into cities from the country each year, China has an aggressive five-year program to build cities and residential housing in order to meet demand.
China needs to add some 500 million square meters of new residential buildings each year. In Beijing alone, there is a need to add 10 million square meters of housing annually (around 100,000 average size properties). The Olympic Games are expected to create 1.8 million new jobs in Beijing alone, further increasing demand for housing.
- International Demand: In addition to local demand there is also demand for luxury residential housing for international executives in Beijing. This already high demand is expected to grow significantly with increased international investment as a result of China’s ascension to the World Trade Organisation in late 2006. Foreign investment remains a strong element in China's remarkable expansion in world trade and has been an important factor in growth of urban jobs.
- Population Growth: At the current pace, by 2010, China will have nearly 200 cities with populations of one million or more. Combined urban population in 2010 is expected to be over 600,000 million, about 45 percent of China's total.
- Capital Growth: Given the scarcity of land available, property values are increasing rapidly. In Beijing, property prices have been increasing at an average of 22 per cent per year since 1998, reaching a record 32.5 per cent in 2004. As a result of strong economic growth, population growth, increasing international investment, international exposure and local investment into infrastructure property prices are expected to continue to rise.
- Currency Fluctuations: The Australian Treasury Report estimates the Chinese currency (RMB) is currently 30 per cent undervalued. Based on this, currency fluctuations offer potential for significant gain for international investors.
- Reciprocal tax arrangements: Reciprocal tax arrangements are in place between New Zealand and China.
- Affordability: NZINVEST has luxury services apartments in Beijing for as little as NZD$250,000.
- Portfolio Diversification: It’s not uncommon for international investments to be rising while local ones are falling or vice versa. Diversifying into international markets can have significant advantages.
- Ease of Access: International investment can be complicated and daunting without an international partner. In 2005 NZINVEST opened an office in Beijing China enabling investors to overcome the cultural, language, geographic or procedural barriers traditionally preventing investment into foreign markets.
- Hassle-free: Our Beijing office is experienced in identifying investment opportunities, arranging finance and legal advice and sourcing and managing premium executive tenants.
Should you choose to sell your investment, our dedicated sales team, with expert local and international knowledge can ensure you obtain an optimum price.
Through our sound knowledge of both the Mandarin and English language, understanding of Chinese culture and strong relationships within the Beijing market, we can provide you with a complete stress-free investment package.
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