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  • What You Need to Know about Property Financing in China

    Post by : expatree

Buying investment in your non-native country can be a rewarding, if risky, endeavor. It’s essential to know the ins and outs of the market in that country, as well as rules and restrictions and the best areas to buy. As with any real estate investment, it’s not something that you should rush into without at least a cursory knowledge of how it works. Moreover, financing your purchase through a bank with unfamiliar regulations can make it even more daunting.

Chinese Restrictions
As an expat, you are allowed to buy a house or residence in China, but with some restrictions. In most areas, you are required to have lived in China for at least one year before you’re allowed to buy. In some areas, that restriction is even longer or paired with strange rules. In Shanghai, for example, you also need to be married to a Chinese citizen before you can purchase a property, and you’re never allowed to rent out your property as a foreigner.

Expats should also know that you can never truly own your home in China. When you “buy” a house there, you’re technically leasing the house for a base period of 70 years. The lease can be renewed, of course, but this means that China can take away your investment at any time if the land is needed for development. Additionally, if you attempt to sell the house before that 70-year period is up, the sale price will reflect that.

Obtaining Financing
As long as you meet the restrictions outlined above, securing financing to purchase a home in China is relatively straightforward. However, you’ll need to have a work permit and proof of stable finances, although the latter is true for any loan. It should also be noted that most of China’s population does not use home loans, but buys with savings or family assistance instead. This doesn’t mean that you can’t take out a loan, but it’s uncommon among the native Chinese.

Fortunately, it’s not difficult to find sellers or banks in China who are willing to accept USD. However, it is essential to note that, in terms of USD, China’s housing market is extremely expensive, and still rising, although the market has become volatile over the past two years. Expats will need to take this into account before they buy.

Alternatives to house buying in China exist, however. While renting is often as expensive as buying, it’s an option to expats who haven’t yet lived in China for one year. Additionally, living communities called Expat Residences are available to foreigners in some areas. These communities are full of foreigners of all cultures and nationalities.

Property financing in China isn’t hard; it’s being eligible to buy a property that’s the hard part. However, once you’ve crossed over all the hurdles barring you from a home purchase (including the price), buying real estate in China is a real option for you. If you’re someone who’s looking to settle down there for the long-term, it may be worth all of the red tape to live somewhere permanently.
Katlyn Hope
for Expatree
Date:2019-05-30 11:02:43
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