Investment

Realty firm eyes Chinese demand

By Wang Ying (China Daily)
Updated: 2010-11-02 07:47

People exercise at the Millennium Water condominium complex in Vancouver. Buyers from the Chinese mainland represent between 40 and 50 percent of the current market for pre-sale projects in the city. Lyle Stafford / Bloomberg

SHANGHAI - Global realty company Colliers International opened a division in Shanghai on Monday, amid mounting restrictions on property purchases in major Chinese cities that have driven the country's nouveau riche to look overseas for investment opportunities.

"We see a growing number of Chinese investors showing special interest in buying houses overseas, due to more frequent global business flows and leisure travel. That's why we established this division here. Now it's fully operational to receive potential clients," said Alan Liu, managing director with Colliers International North Asia division.

Liu expected the trading of overseas properties from Asian clients to increase by 20 to 30 percent in 2010 year-on-year.

In the 18 months since January 2009, buyers from Asia, mainly Shanghai, Hong Kong and Singapore, purchased with the help of Colliers a total of 975 units of overseas properties in Australia, Canada and the United Kingdom worth 3.6 billion yuan ($538 million), Liu said.

"Trading volume made by Chinese mainland buyers will double this year," he said.

Domestic tightening policies toward the housing market have accelerated Chinese investors' moves to hunt for property abroad, analysts said.

Most of the overseas property purchases are motivated by a combination of reasons that include immigration, education and investment, with Canada, Australia and the UK topping the list of destinations.

Canada ranks as the most popular choice among interested Chinese buyers, analysts said.

Buyers from the Chinese mainland represent between 40 and 50 percent of the current market for pre-sale projects in Vancouver, and perhaps a greater percentage for the high-priced single-family residences in Vancouver's most prestigious neighborhoods, Colliers statistics show.

Vancouver's population will increase 34 percent by 2028 from the current 4.4 million people and the rise will fundamentally bring up the value of property, said W. Scott Brown, senior vice-president of Colliers International residential marketing and sales services in western Canada.

Vancouver property values are also expected to appreciate by up to 40 percent over the next 10 to 30 years. In the past 40 years, housing prices have doubled every seven years in Australia. Colliers International expects that in the next five years, housing prices in London will increase 31 percent and that demand will continue to exceed supply.

Colliers also plans to grow its international property businesses in China in two years.

"Compared to the increasingly restricted market in China, the regulations for home purchases in overseas markets are fewer and more flexible, which appeals to local residents," Liu said.

Colliers International was one of the first groups to sell overseas residential projects to Asian buyers in the early 1990s. The company currently has a team of more than 20 sales professionals in Shanghai, Hong Kong and Singapore. It serves Asian buyers and clients in cities such as London, Sydney, Melbourne, Brisbane, Vancouver and Toronto.

China Daily