Property investors looking to China

China is emerging as a potential overseas property destination.

While the country has evolved into an economic powerhouse over the previous decade, it is not often considered as an option for property investment.

However, this may be beginning to change, according to overseas property experts Property Frontiers.

The organisation argues, while it is difficult, acquisition in China can prove to be financially rewarding.

Ownership of private property was legalised in the country in 1997 – since which time the average property price in major cities has grow around 22 per cent, according to Property Frontiers.

Furthermore, the country's economy has grown at ten per cent or more for the last four years, according to the World Bank, and the country now represents an attractive proposition.

"The property market in China is very stable and strong, and I think in 2008, especially in Beijing and surrounding satellite cities, will have a strong growth," said Marsha Lu, a researcher at Property Frontiers.

However, in July 2007 the Chinese government introduced legislation to curtail overseas influence on the economy.

As a result investors must now follow one of two routes to gain access to the market.

"If foreigners have residency in China for over one year, then they can acquire one home," explains Ms Lu.

"The second option is for the foreigner to register a local company or vehicle in China, called a Wholly Owned Foreign Enterprise (WOFE). Either way, foreigners are then able to acquire property."

The Olympics is also likely to have a positive effect on prices in the country.

"Roads and underground public transportation are all being established, so obviously property prices will go up, because it's much easier for people to commute from slightly outer areas where previously property prices were lower," concluded Ms Lu.