Andrew Ness, executive director at CBRE Research for Asia, explained why China real estate investments are so special, and why markets like Beijing, which hit 161% growth year-on-year in 2006, remain money magnets, even though everyone is scared of a property bubble.
Ness said investors aren’t looking just at yields, which have been dropping globally for the past decade as investment had driven prices up. Instead, they’re looking at total returns. In China’s case, total returns are particularly good. Its advantages are threefold: Capital appreciation is strong, rents are underpinned by solid demand, and the RMB will be appreciating steadily for the foreseeable future.