Real estate investment in Shanghai : a legal and practical perspective.

Abstract

This paper seeks to study the legal and practical issues faced by investors in China with the main focus on Shanghai. Based on a survey conducted among investor groups and potential investor groups, it would appear that many misconceptions concerning the China property market exist. The study is therefore particularly timely given the recent wave of local interest in China real estate. In order to minimize the risks of investing in China, some understanding of its property laws is necessary. The paper thus begins with an introduction to the sui generic system of law governing real estate in China which is largely shaped by communistic doctrines. This is foliowed with a discussion of the current tax regime affecting property investments and the impact on investors of the introduction of a property gains tax to curb rampant speculation in recent years. The current market conditions, trends and forecasts are also examined in some depth to assist investors in the ir investment-making decisions. The findings of the project indicate that a correction of the capital values and the rental for properties in Shanghai appear unavoidable owing to a forthcoming oversupply. Qther important practical problems and issues which investors should be aware of will also be highlighted.