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One out of three overseas homebuyers in Shanghai aims to make money out of the property market, a Shanghai Statistics Bureau survey indicated Wednesday.
In the random survey covering 25 residential projects on sale in 11 districts, the bureau found that expatriates are more willing to invest in the city's real estate market. More than one-third of overseas buyers bought their property for investment, compared with 14.1 percent for local residents and 17.8 percent for those from other provinces.
Of the total of 23,465 apartments surveyed, 16.6 percent were bought for investment. About three-fifths of the apartments bought for investment were purchased by local residents.
The bureau didn't provide an error margin. But bureau researcher Xiao Yongpei said the real proportion of apartments bought as investment could be higher than the figure shown.
The bureau defines apartments bought for investment as those which have been transferred, rented or been vacant for more than half a year after the purchase.
"Some apartments that have been vacant for less than half a year could also have been bought by investors, but they have not been counted in the survey," Xiao said.
While the bureau insisted that the local housing market is still healthy, sources said the proportion of investment purchases is approaching a generally accepted alert level of 20 percent.
Recently, there has been speculation in Shanghai property market that said ownership of uncompleted housing may not be allowed to be transferred in the future.
Officials from the Shanghai Housing and Land Administrative Bureau repeatedly denied the speculation.
But it had some impact on the local housing market. In some new residential projects, the number of potential buyers plunged by up to half.
"Many investors asked us about the information. If it turns out to be true, it could severely impact the property market," said Kevin Pan, vice general manager of Shanghai Yitian Investment and Consulting Co Ltd.
Shanghai's housing prices have risen for three straight years. The rise, to some degree, is fueled by investors from outside Shanghai.
According to the survey, mid- and high-end apartments priced between 650,000 yuan (US$78,313) and 900,000 yuan per unit were most popular with investors.
(Shanghai Daily December 4, 2003)
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