Foreign investors cool on Chinese real estate
The proportion of foreign investment in the mainland property market fell to 0.08 per cent in the first two months of this year, the lowest in at least a decade, according to data from the National Bureau of Statistics.
Foreign activity in the mainland's real estate market has hit a 10-year low as risks rise while restrictions remain.
The mainland's real estate market is dominated by domestic investment, but any moves by foreign investors make media headlines and affect sentiment.
"I don't think foreigners are losing their interest," said David Blumenfeld, a partner focusing on real estate at global law firm Paul Hastings. "But people are becoming more realistic" as economic growth slows and transitional challenges loom.
During the double-digit percentage growth in China's economy in the past three decades, anyone investing in the real estate market made a fortune regardless of what they bought and how much they knew.
"A rising tide raises all boats. But it's not rewarding people who are adding value," said Blumenfeld, who advises foreign banks and investors in China. He came to the country in 2005 and now splits his time between Shanghai and Hong Kong.
Many of the transactions he saw during his first few years were foreigners buying existing buildings that had long leases and generated stable revenues.