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Archive for the ‘Real Estate’ Category

In 2007, I investigated the possibility of buying real estate in Hong Kong.  I was convinced that NYC real estate prices are close to the top given where the prices were and the impending slowdown of the economy.  Sure, HK real estate has gone up significantly too; but there’s the China story.  Jack Ma of Alibaba reportedly bought a mansion on the Peak.  There are now over 250k Chinese with over $1mn in liquid assets – where would they invest?  HK real estate was said to be the answer. 

That all seems to make sense until I spoke to some friends who lives in Hong Kong.  Around the same time, a friend decided to purchase real estate in Manhattan.  She has a good story too – that Manhattan is one of the few real cities in the world, and land is limited.  Hence, real estate prices in Manhattan has to go up in the long term.  She thought HK real estate was overvalued.

The moral of the story?  If the locals aren’t buying anymore, you’re too late in the game.

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townhouses1.jpg  palmsprings.jpg 

Yep, Beijing.  I won’t be able to tell… the townhouses (and cars) on the top-left picture are quite similar to those one can find in N. California.  

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China Real Estate

Some interesting findings about real estate in China:

– There exist only a primary market for residential real estate.  There’s really no second hand market as of yet.  This can be attributed to a few different reasons: 1) If you have money in China to buy real estate, you’d have enough to afford quality ones; 2) With the lack of property market in the past century, existing buildings are old and crappy (with exception of the really old ones, like Beijing courtyard houses); 3) Chinese like new things; this is the same with most developing countries as hand-me-downs is symbolic of poverty

– Most new developments are over-subscribed before construction.  Thus, most buy properties based on beautiful drawings and floor plans.

– You buy an empty shell and are responsible for all interior design/construction work.  Nowadays, there are companies set up to help buyers design and build interiors.  I’ve heard also that most people will wait 6 months after renovation before moving in because they’re worried about harmful chemicals in paints and other construction materials.

– They use the metric system.  Prices quoted per sqm.  1 sqm = ~11 sqft

– Developments are named after US/Europe streets or districts.  Some examples are: Versailles, 5th avenue, Wilshire Bouvelard, Yosemite, Irvine, Pasedena, …

Some websites with information about China real estate:
www.focus.cn (chinese), www.soufun.com (chinese), world.soufun.com (Soufun’s english portal), www.xindichan.com.cn (chinese), www.beijingrealestate.com (english, small site)

And here are some properties listed in Beijing:

优山美地概述

Very high-end, targeting really wealthy Chinese or expats. 

The Yosemite Villa in outskirts of Beijing 
www. yosevilla.com

Large houses (8,500 sqft) going for $2-5mn USD.  Pretty darn nice, I’d have to say. 

        And this is what is called “regular residence”.  In an area close to the Silicon Valley of Beijing, still in outskirts of the city.  USD2000/sqm, which is about $200/sqft.  So, about $250k for a 1250sqft 3-br apt. 

As a side note, I’ve asked many Chinese friends, and the consensus of the best place to live in the US is San Diego.  Perhaps a reflection of the pace and stress in China these days… 

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