For Many Chinese, Real Estate Is Best Place to Invest
Taxi driver Ning Long trolls the city for passengers each day, but not out of necessity. The 42-year-old cabbie owns five apartments and rents out three of them, netting him a monthly rental income roughly equivalent to $700.
"I could totally give up cab driving," he says. "Investing in property has been very worthwhile."
From piano teachers to government workers to cabbies, individual Chinese are flocking to invest in real estate. Many are then renting out their properties, resurrecting China's landlord class after a four-decade ban by the Communist Party on private-property ownership, and giving birth to a lively rental market. Rentals are catering to a nation on the move -- companies expanding operations to other provinces, migrants flocking to work in the cities, students attending university far from home.
A man checks the listings outside a real-estate office in Shanghai.
The trend is also benefiting foreign companies. Britain's top home-improvement chain, Kingfisher PLC's B&Q, says its 21 stores in China enjoy annual revenue growth of between 15% and 30%, thanks in part to individual investors' growing penchant for owning property. "Now a lot of people with money buy more than one property. A lot of them come to us [to help them renovate] two or three different properties," says Wen Dong, B&Q's regional manager for North China. U.S. real-estate agency CB Richard Ellis says booming rental markets in Beijing and Shanghai are expanding choices and lowering prices for multinational clients seeking housing for expatriate staff.
The expanding rental market naturally is a boon to the local real-estate industry. Stanford Realty Service Co., a Beijing-based agency that represents landlords and tenants, says its revenue has doubled this year compared with 2003. Hu Jinghui, Stanford's vice general manager, estimates that more than 6,000 legal and illegal agencies currently operate in the capital, "In Beijing, there are three million people searching for rental houses every year, half of which will come to realty agencies," says Mr. Hu.
But the flood of investors into the property market also has some industry executives worried about a property bubble in some areas. In the eastern city of Hangzhou, about one-third of newly built properties stand empty, as investors wait for prices to rise enough so they can sell profitably, says Jia Shenghua, head of Zhejiang University's Center of Real Estate Study.
Last month, the China Construction Bank and Cinda Assets Management Co. jointly ran a 22-page ad in a Beijing newspaper listing more than 5,000 bad-loan cases -- including 1,500 house-loan defaults -- in an apparent bid to embarrass the borrowers into paying back the loans. The Industrial and Commercial Bank of China says its bad-debt rate for individual home loans rose to 1.12% last year from 1.05% the previous year.
Before the Communist takeover in 1949, many Chinese preferred to plough their money into property investments. The latest proliferation of landlords -- many of whom are from the new middle class -- is partly due to an anomaly from China's Communist past, when state workers received paltry salaries but lived in cheap, state-subsidized housing. When Beijing abolished such perks and commercialized housing in the late 1990s as part of its transition to a market economy, it allowed many residents to purchase their homes from the state for a pittance.
As the Chinese accumulate more savings and banks offer mortgage loans, many residents are upgrading to nicer apartments and renting out their older, smaller places. Zhou Jiang, a researcher at the Ministry of Construction's policy research center, estimates that as much as 25% of all housing purchases in Beijing are for investment purposes.
Piano teacher Zhang Yuchong spotted the potential in the property market early. He and his wife started snapping up units at bargain prices in 1999. "Every two months, we'd take our earnings and scour the property market," says Mr. Zhang, 42. With the help of bank loans and investments from friends, the couple has purchased four-dozen apartments, some of which are rented out, some of which have sold and others he hopes to resell at a minimum 50% profit.
A booming rental market in China is catering to workers moving to cities.
Broader social trends also are propelling the rental boom. Extended families used to live under one roof, but now many Chinese prefer to live separately from their parents. Those who can afford it are buying property to house their parents or to put aside for their children's future use.
Ms. Jin, who asked to be identified only by her surname, is a 30-year-old executive of a Chinese equipment manufacturer. She and her husband own a three-bedroom apartment and live with his parents and their one-year-old daughter. Last year they paid the equivalent of $96,618 for a second apartment nearby. "Now my husband's parents live with us but eventually, our daughter will want her own room," says Ms. Jin, "so we bought an apartment" for the in-laws.
Still, the flood of investors into the property market has a downside. In cities like Harbin, a glut in supply is causing rental prices -- especially for more remotely located units and luxury units -- to begin to soften. China last week raised interest rates, in part to cool property prices.
Shu Kexin, a 46-year-old former teacher, and his friends own a dozen properties in Beijing, purchased with the help of loans. "Now we feel like we bought too many," he says, adding that they have rented out only half of their units because they can't get the desired type of renter or level of rent. "Before, we'd make returns of 15% or so, now the average rate of return is 7% or 8%," he grumbles.
Beijing Great Wall International Auction Co., which has been entrusted by banks and courts to sell seized properties, auctioned off more than 50 units last year, from just two or three units annually a few years ago. It handled 16 properties in the first half of 2004, with another major auction scheduled for later this month.
None of this fazes cabbie Mr. Ning. He recouped his investment on his three rental units "a long time ago," he says. "Before the 2008 Olympics [in Beijing], the property market will soar," Mr. Ning predicts
中国新兴阶层：房东
出租车司机宁龙（音）每天都会开车上街兜活儿，但这并不是他维持生计的必要来源。这位42岁的出租车司机拥有5套住房，他出租了其中的3套，月租金收入就相当于700美元。
“我根本用不著开出租，”他说，“房地产投资一直都很划算。”
从钢琴教师、政府公务员，到出租车司机，中国人纷纷开始投资于房地产。许多人都把他们的房产租出去，被政府抑制了四十年之久的私有产权开始复苏，新一代中国房东阶层开始涌现，活跃的房屋出租市场也开始形成。房屋租赁正好顺应了这个人潮涌动的国家的现状──公司业务不断向其他省份扩张，流动人口源源不断涌入城市地区，学生们纷纷前往远方求学。
外资企业也从中收益。英国顶尖的居室装修连锁店，翠丰集团(Kingfisher PLC)旗下的百安居(B&Q)称，在中国的21家连锁店的年收入增长幅度高达15%-30%，部分得益于个人购房的热潮。“现在很多有钱人不止买一套房子，很多人到我们这里来，让我们帮忙装修两到三套住房，”百安居华北区经理文东说。
美国地产代理世邦魏理仕(CB Richard Ellis)称，北京和上海的房屋租赁市场发展势头旺盛，给那些为外籍员工租房的跨国公司提供了更多选择，租金也在相应下滑。
活跃的房屋租赁市场无疑是当地房地产行业的支柱。北京的房屋中介机构我爱我家房屋租赁置换有限公司(Stanford Realty Service Co.)表示，与2003年相比，公司今年的收入增加了一倍。公司副总经理胡景晖预计，目前在北京开展房屋租赁服务的，或合法或违法的机构总共超过6,000家。“北京每年需要租房的客户就有300万，其中半数会找中介机构帮忙，”胡景晖说。
但投资者大量涌入房地产市场也让部分业内高级管理人士忧心忡忡，他们担心部分地区会出现房地产泡沫。据浙江大学房地产研究中心贾生华教授介绍，在东部城市杭州，就有三分之一新建住宅空置，这些房屋的投资者都在等待价格上涨到一定水平后抛售盈利。
上个月，中国建设银行(China Construction Bank)和信达资产管理公司(Cinda Assets Management Co.)一起在北京某报纸上做了多达22个页面的广告，一一列出5,000多宗坏帐，其中住房抵押贷款欠偿就有1,500宗。这个做法明显是为了让贷款人感到颜面无光，尽快偿还银行贷款。中国工商银行(Industrial and Commercial Bank of China)则表示，去年该行的个人住房抵押贷款坏帐率从上年的1.05%升至1.12%。
早在新中国成立前，许多中国人就乐意将资金投入房产。而眼下这一轮房东（许多都属于新兴的中产阶级）兴起的浪潮部分要归因于建国后的政策。当时国有企业的工人拿著极低的薪水，住著政府补贴的房屋。但在九十年代后期，随著市场经济的推进，政府逐步取消了这类补贴，让住房市场逐步商业化，并允许许多居民以很低的价格买下自己居住的房产。
居民储蓄日渐积累，银行也开始提供住房抵押贷款，这样很多居民开始购置更好更大的住房，把原来旧而小的房子租出去。建设部政策研究中心研究员周江估计，北京自购住房的大约四分之一都是为了投资。
钢琴教师张玉崇（音）很早就发现了房地产市场的潜力。他和妻子从1999年就开始投资，用较低的价格购买房产。“每两个月，我们都会带上我们的收入去地产市场转一圈，”42岁的张玉崇说。通过银行贷款和亲朋好友的赞助，夫妻俩已经购置了42套住房，一部分租了出去，一部分卖了出去，剩下的他们准备按获利至少50%的价格转售。
社会大趋势的发展变化也为住房租赁市场的发展推波助澜。以前，中国的大家庭往往都会住在一起，但现在很多人都愿意和父母分开居住。有财力的人会另购一套住房，或者给父母居住，或者给孩子留著。
30岁的金女士是中国某设备生产厂的管理人士，她和丈夫有一套三居室的房子，和公婆还有一岁的女儿同住。去年，他们花了相当于96,618美元的资金在附近购置了第二套住房。“现在我们还和公婆住在一起，但最终女儿会需要一个独立的房间，”金女士说，“所以我们给公婆另购了一套。”
然而，投资者的蜂拥而入也有不利的一面。在哈尔滨等城市，供应过剩已经导致租金下滑，地势偏远及豪华住宅的租金跌势尤甚。中国上周加息，目的之一就是给房价降温。
46岁的舒可新（音）以前是老师，他的朋友们通过贷款在北京购置了十几套住房。“现在我们觉得买多了，”他说。而且，要么因为对租户不满意，要么是对租金不满意，他们只租出去了一半的房子。他抱怨说，“以前，我们的投资回报能达到15%左右，现在只有7%-8%了。”
北京的长城拍卖行(Great Wall International Auction Co.)曾受银行和法院委托拍卖没收的房产，去年一共拍卖了50多套房产，而几年前该公司每年才能拍出两三套。今年上半年，该公司拍卖了16套房产，本月下旬还有一次大型拍卖活动。
但这些问题一点不影响出租车司机宁龙的心情。他在“几年前”就已经收回了那三套出租房产的投资。他说，“2008年奥运会之前，北京的房地产市场将会异常活跃。”
