Speculators from Wenzhou who contributed to the hike in real estate prices in China’s large cities, are moving their money to Malaysia.
A tour group is departing from Wenzhou for Kuala Lumpur and Genting on Friday. With most of the members being entrepreneurs and professional investors, the group looks like it will be doing more scouting property than sight-seeing.
Wenzhou is located in coastal Zhejiang Province, the richest area on the Chinese mainland, and many of the people there accumulated their wealth from manufacturing clothes and commodities such as lighters and drinking straws. They have invested in many cities across the country. Many have bought hundreds of apartments, spending tens of millions yuan. A few residential developments in Shanghai were bought in wholesale, such as The Xiangmei Garden and The Shimao Riverside Garden.
This time, the investors are going to Malaysia for their first overseas purchases because of the high return on investment, the Malaysian government invites of foreign investment and the convenience of getting there from China.
According to the Wenzhou Overseas Tourist Corporation which is organizing the tour, Malaysia’s official representatives will receive the group on their arrival in Kula Lumpur. They will also introduce the potential investors to the local property market and investment policies in major Malaysian cities, where condo and house prices are no higher than those in China’s big cities.
In China’s real estate sector, although capital from Wenzhou accounts for a small portion of the total investment, Wenzhou investors play a disproportionately large role in the market. Their transactions in this sector have driven up the property prices. This leaves the average home buyer to pay high real estate prices.
As the government tightens control on the real estate market to rein in speculators, investors have started to look overseas for new opportunities.
But experts warn the property market in Malaysia moves slowly and the local government may have new rules restricting speculation.
Source: China Daily