China's rich look abroad as home prices fall, others stay put

(Agencies) Updated: 2014-07-21 14:23

Still a buy

Interviews with 10 would-be investors and property brokers in showrooms in Beijing, Shanghai and the southern city of Hangzhou convey that sense of confidence.

"Of course I will buy houses for investment," says former investment industry professional Wu Linzhi, 52, while browsing house for sale ads at a real estate broker in Shanghai.

"Investing in property is one of the best ways to preserve the value of your cash. This is especially true in China's biggest cities such as Shanghai."

Whether China faces a severe property market supply overhang is hotly debated. According to one expert about 20 percent of apartments in Chinese cities stand empty, but others say the figure is exaggerated. For one, it may include homes bought as financial investment where owners have no intention to move in or rent.

Central Bank Governor Zhou Xiaochuan recently admitted that policymakers are not sure themselves whether the property market is suffering from a supply glut or simply going through a soft patch caused by the slowing economy and financial stress.

For some well-heeled Chinese bad news is just another reason to call a realtor.

"I used to buy some wealth management products but stopped immediately after hearing there was a default," said Yu Li, a 43-year-old catering business executive.

"So I just put most of my money into the property market. You cannot save your extra money in banks. Banks themselves are in debt, would you dare to give your money to them?"