Analysts remain confident it will hold up after the Games
(BEIJING) Chen Jingnian is a confident young man with a mission - ride the wave of Beijing's red-hot real estate market and buy a luxury car before he turns 30.
Riding on development: Completion of new lines and stations will also drive new property growth in less developed areas, says Jones Lang LaSalle reportTempted by the promise of rich rewards, the 26- year-old quit a university course that laid out a path as an IT engineer to instead become a real estate agent.
'The salary of engineers is fixed, but the growth potential in the real estate agent industry is much bigger,' he said, adding that he planned to buy an Audi A6 worth around 500,000 yuan (S$99,600) within three years.
'Many of our investor clients have two or three apartments ... and a client I met last month holds more than 10.'
And like many analysts and industry observers, Mr Chen is confident that the Chinese capital's real estate market will not deflate following next month's Beijing Olympics - as has been the case with some other Games host cities.
'I will stay in the industry,' said Mr Chen, who focuses on selling apartments on the Olympic Green area with Century 21 Real Estate. 'Maybe I will open my own company in the future.'
Prices in the Chinese capital jumped by 11.4 per cent last year, compared with an average rise of 7.6 per cent in 70 major cities across the country, according to government figures.
New apartments now hit the market at an average price 3.5 times higher than in 2001, when Beijing won the Olympic bid, according to data collected by real estate agency 5i5j, which has more than 300 outlets in Beijing.
Suites near the Olympic venues and new subway lines, the best known projects covered by a US$40 billion government budget to improve infrastructure and clean the city's environment, are the hottest spots.
'The implications of ongoing infrastructure growth for Beijing's urban development and the property market are substantial,' said a report by real estate consultancy Jones Lang LaSalle.
Not only is navigating the city more convenient and less costly, the completion of new lines and stations will also drive new property growth in less developed areas, it said.
However, the fact that one square metre of a new apartment in Beijing costs about the same as China's average annual disposable income had stoked worries a bubble had developed that could burst after the Games.
Sales this year turned sluggish after China raised the downpayment requirement for second homes in 2007, after earlier hiking taxes and interest rates to prevent the market from overheating.
Debate on whether the property market nationwide was about to spiral downwards has been prominent in the Chinese media, particularly after prices in the south led the fall in the second half of last year.
Analysts attributed the current volatility to frenzied speculation during the market's rise, and an increasingly widespread 'wait and see' attitude this year that delayed buyers' activities.
But Beijing's massive population and the fact that the city is in its initial development phase, are fundamentals that will bolster demand and keep post- Games prices stable in the city, analysts said.
'Beijing is a young man in terms of its growth momentum and development stage,' said Zhang Yukun, a senior investment consultant at property agency Centaline China.
'The Olympics is just an accelerator for the city, not an engine without which the growth would stop.'
Even average consumers feel confident about the potential of the city, which has a population of 16.3 million people and is still growing quickly as people from around the country come to live in the nation's bustling capital.
'The demand is strong - Beijing has so many newcomers every year and many young people I know are still living with their parents and need their own house,' said Liu Jing, a 34-year-old export company executive from southern China who has her own apartment in the city. -- AFP
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