China house prices ‘growing fastest in world’: Hurun Research

For Chinese individuals looking to buy overseas residential property, prices in the popular Toronto market have leapt the most over the 12 months to the end of June, but Hong Kong’s prices also grew a substantial 20.8%, a Shanghai-based research organisation has reported.

In its Hurun Global House Price Index 2017 Half-Year Report, the Hurun Research Institute also noted that house prices in key cities in China, while lower than in many other of the world’s cities, have been rising the fastest.

The southern  Jiangsu province city of Wixi emerges as the fastest-growing city in mainland China, while Zhengzhou, Changsha, Guangzhou and Shijiazhuang also make the Top 10, the report finds.

The report is different than some others that rank global markets on the basis of affordability in that it considers the annual house price changes and rental yields alongside the change in the value of the Chinese renminbi, the currency with which Chinese investors typically start out with as they look to invest.

Also unlike some other reports, it focuses on the most popular Chinese investment destinations, with the result that there may be cities in the world with higher property rises than those included in its database but which aren’t included because they aren’t considered of interest to Chinese high-net-worth individuals.

With respect to the rapid house-price rises in these Chinese cities, Rupert Hoogewerf, the British founder, chairman and chief researcher of the Hurun Research Institute, noted that they are generating  “real concern in China about the impact on the future economy”.

“Although there are measures in place to curb excessive growth, by restricting high prices on new developments, for example, there is an underlying demand for housing that is fueling further potential price hikes.”

Among high-net-worth Chinese, Hoogewerf went on, “global asset allocation”, led by real estate, remains a major trend, in spite of Chinese government efforts to curb overseas investment by its citizens.

Other findings in the report: 

  • The US, with USA, with 15 cities, led way for highest global property return-on-investment (housing price change + renminbi change + rental yield), followed by Germany, Australia and Canada)
  • The “preferred cities for Chinese migration”  of Los Angeles, Seattle, San Francisco, New York and Vancouver “all saw ROI gains of between 15% and 25%”
  • The Southeast Asian cities of Kuala Lumpur, Bangkok and Jakarta jumped into the Hurun Report’s ROI Top 50
  • Forty-two of the 50 cities in the Hurun report saw property prices rise by more than 10%
  • Sixteen of the 50 cities saw rises of more than 20%

the Hurun Research Institute is best-known for publishing research on China’s high-net-worth individuals, including a “China Rich List” as well as a “Hurun Global Rich List”. The word “Hurun” comes from the Chinese version of founder Rupert Hoogewerf’s name, which makes use of the first syllables of his surname and first name respectively.

To read and download the Hurun report on the Hurun website, click here. 

ABOUT THE AUTHOR
Helen Burggraf
Helen Burggraf is the editor of International Investment. A US-trained journalist, she has worked in Rome, New York City and London, covering everything from the fashion and retailing industries to the global drinking water and water-treatment sector, private equity, and most recently, the international cross-border financial services/advice industry.

Read more from Helen Burggraf

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