Economy

Villas still give investors home comforts

By Yu Ran (China Daily)
Updated: 2011-02-21 09:49

Housing information is posted all over a glass window of the Gongheng real estate company on Anfu Road in Shanghai. [Photo / China Daily]

Worth the wait?

Yang said the high vacancy rate for villas lay in the fact that vast profits could be made just by leaving them empty. In some cases, prices have doubled or even tripled.

"Certain real estate investors pay more attention to the villa market because the return rate is much higher than an apartment, although the vacancy rate is almost twice as high," Yang said.

Owning property in China is regarded as a sign of success. It shows the owner is family-oriented and able to handle challenging financial problems. Home ownership has become the ultimate symbol of virility and status in China today, say social observers.

The chronic vacancy rates for villas in China is unlikely to end soon because those rich enough to afford them are rich enough not to have to live in them and quite happy to stand by as they go up in value.

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"In the West, most property owners rent out homes they don't live in. Chinese owners don't care that their properties are vacant because they have found it easy to resell the property for a higher price as the market boomed," said Zhang Kunyu, an investment consultant with Centaline Property in Beijing.

Zhang said the market for villas was more stable than more ordinary housing because it was open only to the very rich, who are less likely to be affected by changing government policies regarding property.

Many who invest in it have thriving businesses that keep them fully occupied, so they don't have time to enjoy living in their new homes. One such person is Wang Sheng, a Wenzhou merchant who owns an export company in Dongguan.

"I plan to live in my villa in Hangzhou after I retire because I consider Hangzhou to be the city with the best standard of living. However, until then, I won't have any time to decorate my villa and prepare to move in," he said.