Monday, October 22, 2012

Shanghai China and Real Estate Wealth

I watched a show on CCTV (Chinese TV in English) yesterday, which interviewed Chinese businessman Jonny Sze, Managing Director of Han Yu Properties, in Shanghai.

He comes from a business family.

He moved from a financing business into the Real Estate when he saw the potential it has in the latter as  a source of wealth.

He said, "the top 10 richest persons in Hong Kong are involved  in real estate".

He mentioned the Asian financial crisis of 1997 which hit China and Hong Kong hard, made worse by SARS outbreak later.

 Real estate in Shanghai has increased, and so have the property prices. House price has increased from 8000 Yuan to 60000 Y per sq.foot.

Central government, the Government of China, has taken steps to stabilise housing prices.

The central government issues 'macro control' to stabilise property price.

After the year 2000, Shanghai has drawn world attention, and many people have moved there and this brought up the property prices.
 Real estate price  in Shanghai increased 50-100% annually.

Bad loans (NPL) also hit developers.

Recent macro-control steps taken by the China government slowed down sales, so the developers have less money to repay their loans, he explained.

Jonny's company's practice, unlike the American style, act as 'middle man' for both the seller (vendor) and the buyer, bringing the two parties to meet up, and help negotiate the final price, which is mutually agreed by both parties.

His business focusses on efficiency of handling the deals.

The China government has a 5-year construction plan: plan to build 36 million affordable homes for its population. The government has built  affordable homes and public rental houses.

EU debt crisis worries businessmen in China too, because Chinese exports will be affected too.


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