While the international investment community has been keenly focused on the implications of the rise of Chinese outbound real estate investment and has begun to debate whether the door to China outbound investment has closed (or is about to), many market participants have failed to recognise the door to inbound foreign investment in China is now more widely open than it has been in more than a decade.
China’s residential property market has been a tale of extremes in recent years, with huge performance gaps often existing between top-tier and lower-tier cities, accompanied by oversupply in many of those lower-tier markets. But it has never been simply that top-tier cities are strong and lower-tier cities weak.
Massive Chinese investments in international real estate have become commonplace in the past four years, but new analysis shows the trend is for even larger deals. Rather than bucking this trend, Beijing’s capital controls may even enhance the move toward bigger investments.
On the world stage, China cannot be ignored, but a plethora of options is available to institutional real estate investors, depending on their comfort level with investing in the country’s property markets. Are they more bullish or bearish about doing so, and why?
The trouble with economic forecasting in general, and real estate forecasting in particular, is that it’s pretty good at telling you what’s likely to happen … until it isn’t. And it is particularly bad at forecasting unanticipated turns in the road, which, of course, is one of the main reasons we attempt to forecast in the first place.
In another indication that the current real estate market cycle may be near or at its peak, global annual fundraising volume for private equity real estate funds decreased in 2016 after six consecutive years of expansion.
February continued the resurgence of both Asia Pacific and global property stocks since December 2016, with the markets returning 4.2 percent and 3.6 percent, respectively. With the performance, the region’s property stocks have now returned 9.6 percent during January and February, while global property stocks have performed well, but have lagged the region, at a 5.9 percent total return.