Map: Provincial Capital Real Estate Investment

Monday, October 9, 2006 16:49

It may seem like an odd time given all the news about real estate scandals and regulations in China to post a map of real estate investment in China, but where there are adverse conditions, there are opportunities.For the last three years, real estate has been the topic of conversations in China.

The markets in Beijing, Shanghai, and Guangzhou have seen significant gains in this time, and as the skylines changed, investors from Hong Kong, Singapore, and Taiwan were flying in by the plane loads on day long trips to buy properties.

In the background though were the second tier cities: Nanjing, Xian, Wuhan, Chengdu, Chongqing, Dalian, and other where only a handful of properties would have been considered equivalent to B grade in the costal cities. Prices for luxury were between 3000-6000 RMB per meter in centrally located flats (Shanghai was 35,000 – 45,000 at the peak).

However, as discussed in our report on Second Tier Residential Investment, things in the last 18 – 24 months have changed for many of these cities. Investment is bringing in new factories, expatriate and senior level Chinese staff, and the local markets for housing have increased significantly.

China Provincial Investment

As can be seen in the map this week (based on 2005 statistics provided by Bureau of Statistics), many of these cities are seeing a lot of investment in real estate and are building a significant about of space.

In building the map, we can see:

  • That there is between 1.5 billion and 6.5 billion USD (number in red) in investment being put into play
  • Chongqing, Chengdu, and Changsha all have a significant amount of real estate under construction (Blue column)
  • That each of these cities are constructing much more than they are completing (purple column), and thus will see a lot of space come online in the next few years

For more statistics and to see some recent transaction details, please download the complete map file

It is said that some of the best opportunities are found in crisis. If that is the case, investors will look past the current conditions and continue to invest in these cities. with many of these cities still in their early stages of development, there are still plenty of excellent opportunities.

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