Experts have predicted that these Chinese investors will be making their main focus in large cities.
The latest insurance news from China is that their insurance funds are now looking to make investments into properties into the biggest Asian cities outside of its own borders.
The prediction is that there will be approximately $14 billion (USD) focused on real estate.
This insurance news has indicated that the primary real estate markets could be the largest cities in Hong Kong, Malaysia, Thailand and Singapore. The insurance funds will be focusing on these areas to help to boost areas of the economy where there is still considerable room for growth.
The insurance news is the result of a limited number if investable prime properties in the mainland’s major cities.
The country’s insurance funds have responded not by moving to the smaller cities, but by heading elsewhere for more attractive real estate. According to a CBRE property adviser’s recent report, while the economy in China is still booming, this insurance news of new investments isn’t coming from China’s own large cities, where there aren’t an adequate number of investable prime properties.
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The reason that the insurance news hasn’t continued into the smaller cities in China is that the oversupply and potential real estate bubble in those regions are causing market prices to drop. Investors have had to start looking elsewhere, and the alternative markets that they have chosen are in the large cities of neighboring countries.
In order to be able to accomplish this goal, China has had to make even greater insurance news by changing the regulations for the investments that can be made by its insurance funds. Where it wasn’t once permitted, they are now being encouraged to invest overseas. Preference is being given by the Chinese investors to property markets that are geographically closer to the Chinese mainland, as well as those that have similar cultural backgrounds. Another driving factor for choosing those markets is that property continues to have a low cost there, at the moment, and history has indicated that when a large investment fund begins a trend, individual buyers often come following.