Chinese Real Estate Investment Rises Almost 20%

Investment in real estate in China has risen substantially throughout 2013, which may be fuelled by demand for residential property throughout the country. 

Recent data from the National Bureau of Statistics of China reported real estate development in the country totalled 8,601.3 billion yuan. This has reached a level 19.8 per cent higher than in the same period in 2012, which shows just how much the market has grown over 12 months.

Out of this figure, residential real estate development accounted for 5,895.1 billion yuan (or 68.5 per cent) after experiencing a 19.4 per cent rise.

Across the country, the majority of investment in real estate development was located in eastern regions of China. Following this were central regions, while western settled in last.

Although eastern regions boasted the most investment in development, western regions experienced the largest year-on-year change after recording a 22.6 per cent increase.

Commercial sector strong

Data from the National Bureau of Statistics highlighted the commercial real estate sector's large rise in sales in 2013 compared to the same period in 2012.

A year-on-year increase of 17.3 per cent pushed the total volume of commercial property sold up to 1.31 billion square metres. Echoing the trends seen in residential real estate development, the majority of commercial property sales occurred in the eastern regions.

The eastern regions also held the largest increase over the year after recording a 28.4 per cent rise in commercial sales.

As more investors and businesses invest in commercial property in the eastern regions, it could signal a lucrative area for residential investors to secure real estate to take advantage of economic conditions brought on by business activity.

Shanghai FTZ to drive more investment?

Despite the strong level of investment in residential and commercial real estate over 2013, activity could be driven further upon the implementation of the Shanghai Free Trade Zone.

This area is expected to become a large, crucial business hub, which could spark rapid growth for investors of both residential and commercial property in and around the precinct.

At a January 19 conference, Shanghai Mayor Yang Xiong stated the government aims make progress on the Free Trade Zone in order to turn the city into a "pioneer" in national reforms.

Convertibility of the of the yuan and interest rate liberalisation were some of the financial reforms the government will focus on this year to spur on business investment and activity in the Free Trade Zone.