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.