| After looking at the Shanghai Real Estate market in detail, it looks like it's still got a few good years left before a bust. It is riding low interests (4-6%), high down payments (20-40%) and a massive secondary market this is happy to flip for 5 to 10% within 3 to 6 months. In about 2 years, I believe it is going to begin to slow down when the mortgage exceeds the rental cashflow because the majority of secondary market investors are individuals that can't actually afford a monthly mortgage.
This is not a market for the faint at heart though, nothing like doing out-of-state appreciation investing in California where you can simply hire a property manager to do everything for you. Professional services here are still very immature and under-developed and an absentee owner would have an ulcer - with the buying, managing and selling process. |
Is the Real Estate Cooling Down? - Part III