The Hurun Research Institute recently released a 12-month global housing price study covering June 2016-June 2017. It highlighted impressivepricinggrowth in China and elsewhere, and indicated some of the factors that continue to push Foreigners Buying Real Estate In Us to overseas markets.
According to the report, Toronto ledglobal home price growth with an increase of 26.1%. A strong economy and prosperous infrastructure thereled tonew real estate possibilities in anunprecedented city expansion.
ThreeChinese cities ranked in the top five in the world for price increases: Wuxi, Hong Kong, and Zhengzhou. Wuxi topped the three with an astounding 22.9% price growth, while Hong Kong and Zhengzhou reached 20.8% and 20.2% respectively.
Unsurprisingly, China’s growth dominance was not relegated exclusively to the top 5. Of the top 50 growing cities in the world, China had a place in 21 of them.
The United States also reached the charts, ranking highest in the cities of Seattle and Dallas, with a 12.7% and an 11.2% growth respectively.
As one interesting case, the city of Reykjavik, Iceland saw pricing growth of 23% for the same period, putting it in the top 5 hottest markets in the world as a result of high levels of tourism and limited housing.
What is Leading to the Pricing Growth in China?
Sweeping infrastructure developments and a renowned focus on industrial growth have spurred these explosive price increases in many urbanand rural Chinese centers.
The pricing growth in China is remarkable, but it is also concerning to some industry experts. The concern rests in what could be a housing bubble, as the numbers suggest that certain local economies may be unable to support the stunning price growth.
Shanghai and Beijing might be most at risk, according to Bloomberg. These cities are facing moderate population gains and marginal wage increases while housing prices continue to skyrocket.
In response, there have beeninitiatives to cap city populations, lower congestion and traffic, and place strict limitations on who can own property in Beijing and Shanghai.
These measures are proven to be effective on a preliminary level, with time being the only factor that will determine whether or not they avert a bubble. The Chinese government also retains a variety of other safeguards such as lowering demand by raising property taxes or increasing the available land supply.
Where Does Toronto Compare?
Canadian government officials are equally aware of the dangers of a property bubble. They have subsequently tried to stabilize growth in Toronto, where officials introduced recent real estate regulations intended to slow the market down. The measures have worked in the short-term, resulting in a preliminary report of a 40% drop in sales in July 2017.
With the Hurun report displaying what some believe isconcerning pricegrowth in China, investors have continued to respond by seeking properties abroad. The report also noted that cities such asVancouver, San Francisco, and New York City continued to be top destinations for Chinese real estate buyers and other international investors.