Hangover time

No one needs to tell Yang Huiyan what a difference a year can make in China’s residential real estate market. As the major shareholder of high-end housing developer Country Garden, the 27-year-old became the country’s richest person last year on the back of the firm’s US$1.65 Hong Kong share offering. Yang’s wealth soared to some US$17.4 billion, putting her atop the benchmark Hurun rich list.

Enter 2008. A plummeting stock market, sluggish housing sales and a government-induced property cool-down have seen Yang’s worth nosedive 62% to around US$4.9 billion to date. The property market malaise stretches all the way down the value chain. Your average guy on the street has lost billions less than the Hurun set, but he is seeing the value of his home fall for the first time in recent memory, and shares the same feelings of unease.

In this issue of Focus, we take a long look at what’s to come in the next 12 months for residential properties around China. Our first report (p6) examines how investors’ current "wait-and-see" sentiment is affecting developers, as well as how much the current downturn is going according to Beijing’s master plan.

High-end and luxury properties – be they villas (p16), serviced apartments (p12) or even swank refurbished Beijing siheyuans  (p6) – are all facing their own challenges. Most notably, as the global financial crisis threatens to diminish the number of new expat arrivals in 2009, we ask companies on the ground how they are readjusting their approaches.

On the investment front, learn the legal terrain of foreign property investment from our Guest Word (p14) by Allen X. Jiang. And for a look at how wealthy Chinese are beginning to buy property in Southeast Asia, see our report on p18.

China’s property market is vast, and though tier-one cities get the most ink, it’s worth remembering that there are 25 major markets, all starting to function on local factors. Check out Wide Angle (p17) to get the lowdown on what’s happening beyond the first tier in property prices.