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China still looks strong despite bumps

It has been a time of highs and lows in the Chinese property market. While foreign investment has continued to increase even in spite of heavy government regulation to the contrary, some of the Chinese property firms have begun to lose money in terms of their stock value, and many of the indicators are down in the short term for the property market as a whole.

However, the outlook for foreign investment into China is still quite impressive especially when compared to many of the other property markets within the international world.

China’s average property value increased by more than 10% in the 70 most populous urban centres in the country over the last year, and much of that increase is driven by high demand in the marketplace that is currently also resulting in higher supply side operations being conducted by many of the firms located within the borders of the country.

One of the biggest worries in the property market of China is the fact that a city like Beijing, which acts as a belle weather for many of the other parts of the property market in China, will experience a housing downturn in late 2008 and early 2009 in the aftermath of the Olympic rush. Similar downturns have happened in Sydney, Barcelona and many other countries that have had booms tied directly to the Olympics.

However, the fear for China going into one of those downturns is misplaced for the simple reason that their housing boom is not primarily tied to the Olympics. Foreign investment in cities like Beijing was taking off coincidentally to the Olympics being awarded to the city, and many analysts believe that a lot of the economic growth being experienced in China (which has an economy growing by double-digits on a yearly basis) would have happened regardless of whether Beijing got the Olympics or not. For people looking at long term property investments in the country, that is good news indeed.

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