With the highest sales potential of 1.36 billion people China deemed to be the globally most attractive investment location. The yearly increase of population amounted 0.5 % in 2014. The fast development of China in combination with high increasing rates results in a continuing demand for new apartments. Great investment opportunities will arise under these positive circumstances. In the recent years Chinas opening policy led to a fast growth of the middle class which is consumption oriented. Already now around 250 million inhabitants of China belong to the middle class. This figure is expected to increase by 100 % until the year 2025. This is equal to 40 % of the population and therewith to half a billion people.
China managed to get a stable financial system and to establish a lot of reforms after decades of efforts whereas for example in the US a huge real estate bubble has been formed in the last ten years. Contrary to the US the Chinese do not have high private debts. Only 12% of the Chinese economy are mortgage loans whereas these amount to 100 % if the American economy. The banks in China have relatively low requirements for real estate developers, which amount only to 7 % auf the unpaid loans of banks (53 % in the US). Thus, the slow-down of the real estate market is not a systematic risk.
Chinese purchasers of properties tend to save money before buying an apartment in order to afford the monthly repayment. Often they buy apartments directly with equity, without any leverage.
Due to their mentality, Chinese try to avoid taking loans from banks. Furthermore, the repayments can be done often very quickly due to the savings and often also due to the support if the family. Therefore, this mentality differs totally from them of Western customers.