There is a difference between asking price, and actual getting price.
There are many properties for sale where people are asking a price that will get the seller the return that they think they are entitled to. If they cannot get that price they usually do not sell, but they will not lower the asking price. In other words, they will only sell for a profit that meets their expectation, otherwise they will just hang on to the property. It is possible that the apartment you looked at 4 years ago is still for sale.
I know people with 30 properties that they will just not sell, because they cannot get the asking price. There are also companies that have property on their books, that is overvalued. These are just two of the causes of anomalies in the property market.
I am not sure, but I think market statistics could be based on asking price, and not on actual selling prices. This also affects sellers expectations of what they will get. An estate agent told us we could sell a property for between 1million and 1.2 million, we actually sold it for less than 700k.
The actual turnover of second hand property is possibly a low percentage of the actual number of properties on the market.
Even putting this aside. With a rental mutliplier of 800X, property is not a good investment.
tigertiger, what you say makes a lot of sense. I lived in Thailand and I heard a joke that if a merchant wasn't selling enough of an item, instead of lowering the price to increase sales, he'd jack up the price thinking even though he may sell less it would be at a higher profit. LOL
Many condos remain unsold because they think they can wait it out and make a huge profit.
Years go by and they still won't sell it losing out because they could have rented it until they found a buyer but No!!!!!
Same goes with empty store fronts. They stay unoccupied because they wwon't lower the leasing price. Years go by and they are still empty. I think they are losing big money. '
Just out of curiosity, yesterday, we went to look an old style apartment in a rundown building, mainly because it wasn't too far from a metro line. Of course, they don't bother making it look presentable. I WASN'T surprised to hear the "asking" price was 1.25 million, LOL. Of course, that price was negotiable, to what, 1.1 million, LOL. 600k is what I thought it was "possibly" worth, specifically because it was a 10 minute walk to the metro a consideration for renting and the small possibly of the buildings being demolished in the future.
Funny thing about The Market, everything costs exactly what it's worth. If it wasn't worth the price then you wouldn't have paid for it and if you paid for it then obviously it was worth that much to you at that time.
I really don't know what all this fuss about pricing is all about. Just a bunch of sour grapes?
One thing that adds another characteristic to Chinese property market, is the division between rural and urban residents.
China has seen a steady flow of rural migrants to bigger cities, that the authorities have tried to curb with many measures that only make the urban hukou even more sought after.
And one of those is the often cited requirement of owning property in city before being granted urban hukou.
The expected return of investment for these people goes beyond real property value. They buy future for their lifes, not just their wallets.
And many people with resources to acquire extra property have no doubt bet on this.
In some cities those bets may be lost as China's hukou reform progresses.
Related reading: www.china-briefing.com/[...]
@Vagabond. Who told you the inbound limit was $50,000? My understanding was you could transfer IN as much as you wanted if it was shown to be for buying property.
Has anyone ever encountered an option of a Chinese person receiving payment in foreign currency to their offshore account? For an apartment, or some other big purchase?
Not sure if that would go well with authorities that are required to play a part in apartment transactions, but I'm sure there are Chinese interested to create such funds abroad.
You would leave you self open to the risk of being ripped off. It might also be viewed as money laundering, if the transaction is done in the wrong way.
Hotwater, a Bank of China employee. I kinda remember that same restriction 4 years ago.