Any suggestion for a nice area for a good price and deal ?
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GoKunming Forums
Buying apartment
www.gokunming.com/en/forums/thread/12212/old_house_vs_new_house
www.gokunming.com/en/forums/thread/13076/moving_hukou
These threads are all relevant to your questions.
With today's market, I would not buy. Let's assume you can buy an apartment in a half decent and accessible location. 100 sqm will cost one million upwards. That could be on a mortgage. Then you need to decorate at a cost of 600/sqm for absolutely basic, which you will need the cash for, or maybe another loan but not at mortgage rates of interest.
If at the cheaper end of the market you can expect construction quality issues.
You can buy places decorated by the developer, these cost about 20 000/sqm to buy. Some of these have a bad reputation.
Alternatively buy used predecorated places which may not work out that much cheaper, but you will have a better idea of what you are up against.
Do the sums, but renting is a more viable option. Bear in mind that the property that will increase in value is going to be in prime locations and cost upwards of 30k/sqm. Property in China is no longer a safe investment. In 10 years you could easily find yourself with negative equity and/or an unsalable property.
There are already some areas where property has gone down in value.
@ tiger: Perhaps you're right about price value in apartments going down over the next 10 years, although my admittedly uninformed impression is otherwise. But where have property values gone down lately, and over how long a period of time?
Being the capital of Yunnan, anywhere within the 1st and 2nd ring roads would be a safe investment if the building is in good condition.
Anybody heard anything about any of the older xiaoqu's (not older 'urban village' areas) being demolished? I haven't, but I'd like to know.
Define safe investment. Won't devalue, is different to keeping pace with inflation plus what you could have earned investing elsewhere.
As for property values going down. Outside of Kunming certainly. In Taiping (Kunming's new satellite town, on the other side of XiShan), they have gone down a lot over the last two years. We bought a 3 bedroom townhouse 8 years ago for 700k, two years later it was worth 1.7m, we then sold it a year after that for 1.4m. A friend has just bought a 6 bedroom villa with large garden and views for 3m.
My wife's hometown. The scenario there was different but will, I think, become a pattern. First, middle class could upgrade old properties and buy land. Then after accruing a bit more wealth the middle class moved to the city, and the only buyers were the farmers who now had some money. However, the farmers have brought down property values in the town, and accelerated the out migration of the middle class. The opposite of gentrification, or gentrification with socialist characteristics.
I am not sure what is happening in Chenggong, but away from the main shopping/social areas/metro line, I am sure that if people needed to actually sell, they would have to accept less than they are asking, and less than they would have accepted 3 years ago.
Apart from a few hot spots in China in core areas (not outlying areas) of tier 1 and tier two cities, prices have been going down in most of the top 70 cities that the statistics are gathered for, for a couple of years now.
And even if property prices are flat-lining in many cities, the real rate of inflation isn't small. This eats into the value of your investment, in real terms.
@tiger: True about keeping up with inflation; property as investment (all these new flats) is a different issue - tends to drive inflation, I'd think.
Recent economic (relative) slowdown, yes - but over the next 10 years?
On the point of rent verses buy. In other markets I would say that rent is dead money. But if a place that would cost 2m (with decoration) can be rented for 3000 a month (or less) that is over 55 years to get your money back, without paying for any repairs or maintenance.
Or if there is a problem with the property, like one guy on here who gets no water for part of the year because his place is at the top of the hill, and during water rationing the infrastructure cannot provide water up the hill; then you cannot move unless you can find a buyer. Some developments will be blighted by reputation.
There are villas and town houses in Dianchi Weichen that are about 8 years old, that are having roofs replaced, and this started about 4 years ago. A result of substandard construction.
@Tiger: Water problems and substandard construction, definitely things to look out for.