China and it's Real Estate trends

China's economy during the past 30 years has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy.

Population 1.3 billion; 2010.
Pop. Growth 0.5%; 2010 est.
Unemployment 4.1%; 2010 est.

China is the world’s fastest growing economy with a GDP growth rate that averaged 10.2% between 2002 and 2006, reaching a high of 13% in 2007. Inflows of foreign direct investment have risen to over $108 billion annually since 2008. In 2009 China stood as the second-largest economy in the world after the U.S., although in per capita terms the country is still lower middle-income. Economic development has been more rapid in coastal provinces than in the interior. One of the key factors underpinning China’s demand for housing has been the secular urbanization trend. Approximately 200 million rural laborers and their dependents have relocated to urban areas to find work. Between 1996 and 2005 the urban population increased by over 50% from 373 million to just over 562 million; growing by 15 million people annually.

Homeownership Yes. Also long-term land leases
Households 525 million; 2010 est.
Median Home Price In 2009, the average cost of a 968 sqft flat in Beijing was $236,000 USD.
Annual Transactions 10 million; 2010 est.
Estate Agents 25,000 real estate brokerage agencies employing approximately 1 million agents
Large Real Estate Firms Beijing Lianjia, Century21, RE/MAX, Shanghai Housing Exchange, and Shanghai Xingy (Coldwell Banker).
Financial Institutions China’s big four are: People’s Bank of China, China Construction Bank, Industrial and Commercial Bank of China and the Agricultural Bank of China (all state owned).
Mortgage Rates 3.5% to 4.0%; Large cash-based economy.

In 2008, the government announced a $585 billion USD stimulus package with allocations for housing and as a result residential property prices increased. Property prices in Shanghai in April 2010 were up by an average of 9.8% over the previous year and prices in 70 cities rose 12.8% during the same period. However, China’s banking regulator believes that it sees growing credit risks in the real-estate industry and has warned of increasing pressure from non-performing loans. Some economists even predict the “bubble” in China’s property market is going to burst with prices estimated to fall as much as 20% in 2011/12. Going up or down will be determined, in great part by, what China’s government does or doesn’t do.