If you have never considered buying investment property in Beijing or Shanghai, it may finally be time. China recently loosened the rules that made it hard for foreigners to invest. Not only have the regulations changed, but property prices have improved over each of the past three months. Housing sales have risen eight percent this year. Just in August they were up 15.3 percent from a year earlier.

In fact, China’s consumer economy is growing and helping drive a property rebound. Although, as the Economist pointed out recently, you wouldn’t know it from the headlines in the Western media.

Despite the improving prospects, I’m afraid there are still some limitations on what kind of real estate you can purchase in Shanghai’s famous French Concession. You won’t be a Chinese property mogul anytime soon. 

Purchases for now are limited to international companies and expats who live in China. The idea is that you purchase for your own use, rather than as a pure investment.

That means most purchases will take place in Guangdong and Shanghai, which are home to more than half of the 600,000 expats in China. Beijing is the third most popular location. 

While there are many Aussies living in China, the largest expat populations are the South Koreans, Americans and Japanese.

What you are really wondering, I’m sure, is whether Chinese real estate is a good investment. If you choose wisely, it can be.

As you know, good investors make their money on the buy, not the sell. I suggest being willing to hold for at least three years, choosing a well-constructed apartment and selecting an expat-friendly neighbourhood of Guangzhou, Shanghai or Beijing. 

Don’t worry, however, if you don’t want to move to China. You can still make money by selling real estate to the Chinese, rather than buying it from them. We expect demand for Australian property to be up 10 to 15 percent this year.