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The China Market May Crash This Year
May 2010
 
US Property Valuation has been advising its clients with property holdings and real estate interests in China to be ready for a steep decline in the property market sometime between now and the next 12 months. 
 
China's economy is showing signs it is slowing - which we can see from the reduction in purchases of raw materials such as copper.  When you toss into the mix the amount of vacant office and commercial space throughout the major cities in China and the level of speculation that has been the hallmark of the Chinese property market - a steep decline in values should be anticipated. 
 
It is estimated that as much as 60% of China's economic growth in recent years has been fueled by construction.  China's centralized government has allowed construction companies and developers to borrow money on very favorable terms.  This helped keep China's growing population fully employed and content (with new TV's, DVD players, and for some families their first car).  But rows of empty office towers and apartments purchased as a speculative investment but never occupied are a good sign the music is about to stop - and you don't want to be left without a chair when that happens. 
 
US Property Valuation was one of the first to alert clients to the pending value declines that awaited the US back in late 2005/early 2006.  Property price increases and lax lending criteria were driving the US market higher and we were advising clients back then that property price increases were not sustainable.  Some clients listened, but sadly most did not.   
 
USPV is not alone in calling the turn in the Chinese property market.  Famous investors such as Marc Faber (a Swiss economist living in Thailand, but keeping a small office in Hong Kong); Jim Chanos, a hedge fund manager; and Kenneth Rogoff of Harvard University.
 
One other factor to consider is the World Expo (formerly known as the World's Fair) Curse.  Shanghai is the host of the 2010 World Expo, but unfortunately the host county many times experiences a steep economic decline within a few years. 

US Property Valuation, LLC
3705 Bank of America Tower
12 Harcourt Road, Suite 739
Hong Kong, China

Tele. 852-8197-8779
Fax.  852-3015-4855
Email:  china@uspv.us

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From our office in the Bank of America Tower in Central Hong Kong we are able to assist our American and European based clients with 'on the ground' service.  The Asian property market is rapidly expanding and fast moving.  Our clients need real estate and valuation services in this market.  We have teamed with the best real estate appraisers, valuers, and consultants in 15 major markets in mainland China, Taiwan, and Hong Kong. Call us today at 852 8197 8779. 

Through our partnerships we are able to provide our clients with the information needed and then put this data into a format that meets our client's bank and financial reporting requirements. 

Whether its an acquisition of a single industrial building, valuation for mergers and acquistions, due deligence reporting, market consulting, or site selection - US Property Valuation has the skills, experience, and personel to assist you now. 

Recently, James Ahle, MAI met with the top Chinese appraisers in Guangzhou to discuss partnership and cooperation arrangements. Mr. Ahle is the only MAI appraiser working Hong Kong and one of the only MAI's in all of China. He has formed relationships and partnership agreements with the top appraisal firms in China. Click on the link below for a PDF of the english translation of a chinese press release from this meeting.  

CLICK HERE TO DOWNLOAD PDF

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