The country’s property market is projected to continue its rapid growth over the next few years. The current property boom has led to a surge in investors looking to capitalise on the potential of the Chinese real estate market. An estimated 300 million people are expected to enter the property market by 2022, driven by rising household incomes and increasing demand for low-risk investments. However, there are several risks investors need to consider before committing their capital. Most importantly, there is a lack of regulation in many parts of China — which poses a significant threat to the whole sector. This article explores five key trends that will shape what Chinese property investors are searching for in 2022.
Rapid Growth In New-Build Construction
There has been a rapid increase in the number of new residential buildings constructed in China in recent years. The country’s total construction output increased by a staggering 27% in 2017, with new-build construction accounting for 60% of that. This rapid growth in new-build construction has been driven by the increasing demand for housing among the country’s growing middle class. There has also been a significant increase in the number of young people in the country in recent years, as more and more families have been opting to have a second child. In addition, a significant rise in household consumption has also fuelled demand for more housing units. This robust growth in new-build construction has led to a surge in investment in the residential property market. In fact, new-build investment accounted for 70% of total investment in the sector in 2017. This rapid growth in new-build construction has increased the country’s total residential property stock by nearly 10% since 2013. Moreover, new-build construction has also been a major driver of economic growth. This is because it has led to significant improvements in the quality of life for urban residents. For example, new-build construction has led to a marked increase in the availability of public spaces, cleaner air, and higher standards of living.
Strong Demand For Maintenance Properties
The country’s property markets have been experiencing strong demand for maintenance properties. This is because many urban residents have been looking to buy low cost residential properties that they can rent out or use as a long-term holding position. This strong demand for maintenance properties has led to a significant increase in gross rental yields in some parts of the country. In fact, gross rental yields on residential properties have risen to 10% in certain cities, such as Shenzhen and Hong Kong. This strong demand for maintenance properties has also been driven by an increasing number of investors who are looking to purchase low cost properties for investment purposes. A significant number of Chinese investors have been increasing their holdings in real estate investment trusts (REITs) and pension funds to diversify their portfolios. This strong demand for maintenance properties has resulted in an increase in the country’s residential property stocks by nearly 10% since 2013. Moreover, maintenance properties have also served as a long-term source of income for many investors. This is because they provide steady returns over the long term. This is because they are less volatile than new-build properties, which are sold every year or two.
Rental Property Investment Continues To Grow
The popularity of residential property investment has been accelerating over the past few years. This is because many Chinese investors have been looking to add to their current portfolios. This growing interest in real estate investment has been fuelled by rising household incomes and a significant increase in the number of middle class residents. This growing demand for residential property has led to a significant increase in the number of residential property stocks. In fact, the number of stocks traded on China’s stock markets has risen by nearly 60% since 2013. This growing interest in real estate investment has also been supported by the country’s property market regulatory framework. The central government has been making efforts to improve the country’s regulatory framework for the real estate sector. For example, the government has been implementing a suite of reforms aimed at encouraging the flow of funds from institutional investors into the sector. This has resulted in the launch of a number of real estate investment products that are aimed at attracting institutional investors. This growing interest in real estate investment has also been driven by rising demand for low-risk investments. This is because a large number of investors are looking to diversify their portfolios following a series of global financial market volatility. This growing interest in real estate investment has also resulted in an increase in the amount of money flowing into the residential property sector. In fact, residential property investment is estimated to have accounted for nearly 40% of total financial assets in China in 2017.
Chinese Investors Will Embrace Technology As An Asset Class
Traditional asset classes such as real estate and domestic stocks have been experiencing a drop in popularity among Chinese investors. This is because these asset classes have been subject to a number of risks in recent years. For example, a sharp drop in the prices of these assets has led to a significant decline in household wealth. This is because a significant portion of the country’s household savings have been invested in these traditional asset classes. However, there are a number of technological innovations that have the potential to change this. For example, blockchain technology has the potential to shift the way people view real assets. This is because it has the potential to disrupt the real estate and transaction finance industries. This growing interest in technology among Chinese investors is likely to benefit the country’s property markets. This is because it will accelerate investment in real estate and encourage adoption of new technology-based real estate services. This rising interest in technology has also been supported by the growing adoption of mobile payments among Chinese consumers. This is because it has the potential to reduce the cost incurred by investors on transaction fees. This rising interest in technology among Chinese investors is likely to continue to drive investment in the country’s real estate sector. This is because it has the potential to transform the sector through increased adoption of advanced technology.
Shifting Landscape In Mortgage Finance
There are concerns that the impact of stricter mortgage regulations on the country’s property market. This is because mortgage finance has been a major source of demand for the residential property sector. For example, mortgage finance contributed nearly 40% to total residential property investment in the country in 2017. This rising demand for mortgage finance has been driven by a significant increase in the number of middle class residents in China. This is because a large number of these people have been purchasing residential properties as their only source of income. This rising demand for mortgage finance has also been driven by the growing adoption of online mortgage services among Chinese borrowers. This is because it has the potential to reduce the cost incurred by borrowers. This rising demand for mortgage finance has also been supported by the growing number of Chinese consumers who are using their mobile phones for financial transactions. This is because it has the potential to reduce the cost incurred by these consumers. However, stringent mortgage regulations implemented by the central government have the potential to dampen the sector’s growth. This is because it has the potential to reduce the availability of mortgage credit for Chinese borrowers.
The Bottom Line
There are a number of key trends that are likely to shape the Chinese property market in 2022. These include the rapid growth in new-build construction and strong demand for maintenance properties. Real estate investment in these two sectors is likely to continue to be a major source of demand for the residential property sector. In addition, there is the potential for blockchain technology to become an asset class in the country’s property sector. There are several risks that investors need to consider before committing their capital to the residential property sector. These include the lack of regulation in many parts of the sector and the threat posed by rapid urbanisation.
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