Buying an apartment in China - Buying a house in China Nanning
Latest Journal Post - http://www.mynanning.net/2011/01/getting-tougher-on-foreign-property.html
(Article below first Published 2008)
Property prices are on the up in Nanning as well as other popular locations all over China.
Most larger cities have reported rising prices this past year.
Beihai, a very popular sea resort close to Nanning is reporting a higher than average increase.
In Nanning property prices are rising steadily, around 12% has been reported but I suspect this is an average as I know of one location where prices have nearly doubled in 12 months.
I am fortunate to have a Chinese real estate agents friend here in Nanning that helped us.
There are no reliable online Property agents displaying in English, yet...
How much is property here in Nanning?
In the past I have viewed property from around 1000RMB per sq metre to over 10000RMB per sq metre.
I have viewed 3 bed roomed apartments of 100 sq metres to 400+ sq metres.
I have viewed 4 bed roomed apartments of 200 sq metres to over 1000 sq metres
From this you can easily see that price is relative.
Size of rooms, extra living rooms, kitchen and bathroom space all need to be viewed to fully understand how a cost is arrived at.
Just like any where else, what looks good on paper may in reality be totally unsuitable for your needs.
Here, property is sold by the square metre.
Most agents will display the number of square metres.
The price per square metre will depend on a particular block in a particular location, the quality and the demand.
Prices vary enormously from block to block, just like any where else in the world.
As low as 3000/3500RMB per sq metre but also consider that price per sq metre can be as high as is obtainable.
The price above reflects an already lived in apartment.
If buying new, then prices will depend greatly on the developer and demand and will probably be higher.
If new, you will need to allow for fitting out, flooring, plastering, tiling, plumbing, electrics, kitchen, bathroom and sometimes windows and doors etc, etc. It will be a shell.
Once again it will be up to the individual, what quality standard is required. The cost here could be for a 3 bed roomed apartment of average size (150 sq metre) as little as 20/30,000RMB, or it could also be as high as you like.
When purchasing property in China it is in my experience a 5 stage process:
1. Find a property
2. Agree a price
3. You pay a deposit on acceptance of offer (around 10,000RMB) This is non refundable should you decide for any reason not to buy. The vendor also has this obligation. These first 3 stages could happen on the same day.
4. Next you arrange with the vendor a bank transfer of around 75% of asking price into an account of the vendors choosing...a little scary as you will need to wait hopefully only around 30 minutes for the vendor to confirm they have received it. Normally the agent, if there was one will be present to help the process along. This stage usually happens a week or two after payment of the initial deposit if the existing owner has a bank loan (mortgage) outstanding on the property. At this stage it is usual to be able to move into your property.
5. Some 4/5 weeks later you should be able to pay the remaining balance. It is at this stage you will receive the property registration documents. This final time frame is dependent on government departments speed.
Sometime between stage 4 and 5 the agent will probably ask for the agents fee.
It is now at this final stage that you will also need to pay the various taxes and other disbursements. These normally average out at around 8/10% of selling price. When you enter into the early price negotiation you can try to split these costs or even insist the vendor pay them...good luck!
There are hundreds, if not thousands of new apartments available in Nanning.
I am pretty certain that the buying process for these new apartments would be easier than buying a 'used' apartment as you would be dealing with a business (property developer) and it would be in their best interests to make it all as painless as possible.
Whether or not there is much room for negotiation will depend on demand and if what I have seen is the norm then the chances are against you.
One thing worth noting, whilst we were looking we came across a new block being built. When we eventually found the sales office and enquired we were told that we would need to put a 10% deposit down immediately and the balance would be due within 7 days.
So this meant we would need to pay totally for an apartment that I found out after much questioning would not be completed for at least 12 months and we would not be able to move in until then.
There appears to be no rules, rhyme or reason here, each situation is different.
The apartment we eventually chose in Nanning was pre lived in and owned by a Chinese lady.
We found it through an agent and viewed it as soon as we were told it was available. The owner was present during our viewing.
After viewing, later that day we went back to the agents office, we already knew the asking price as the agent had provided these details to us before viewing...or so we thought.
We told the agent we wanted to buy it and after a quick phone call to the owner she appeared at the office within a few minutes. We were all taken into a private room at the rear of the main agent office where negotiations were conducted.
Usual story, a whiff of a westerner and suddenly prices rise. We were having none of it and I was prepared to walk away. Eventually we agreed, at the original asking price.
In all, we spent about 2 weeks looking all around Nanning for something that was suitable.
We viewed many apartments in all shapes and sizes in many locations at differing prices.
Some through an agent, others that we saw being built and we searched for the sales office (not always an easy office to find).
Interestingly, many being built were for 'workers'. It is not uncommon in china for large businesses to provide accomadation for it's staff.
Many were half way through construction and were all sold !
This annoying situation happens a lot, you find your ideal location block only to find that they are all sold.
The Chinese are great speculators and a lot are sold for this purpose, speculation.
Buy now, do nothing, sell in about a year for profit.
Whether this is only Nanning or is happening all over China I do not know for sure, I suspect the latter is the case.
In fact we did look at a few apartments in what I would consider to be older blocks, obviously bought at time of construction, probably around 2/3 years ago and now back on the market in their 'raw' unfinished state, a good example of speculative purchasing.
The Chinese do not like second hand property and the fact that it has never been 'fitted out' makes it 'as new.
To buy and register property in your name or in joint names including yours you need to have been working or studying in Nanning for at least a year. (New rules in Nanning as of July 2007). Since our purchase, I have been told that you only need to have lived here for one year in order to purchase in your own name. I cannot confirm this and await confirmation of this, by a real life experience senario.
This is how it was described to us by the officials at the office.
To buy and register, I really mean to register because it is possible to buy here and then register the property in your wife's name. It is only at registration, the bit where you pay the government taxes and receive your registration papers that require you to have been working or studying Nanning for one year if you want your name to appear on the document.
This is my experience, let me explain…
The day before we were due to go to the government office the real estate agent phoned saying, there might be a little problem, the government office are now saying you need to be resident in Nanning for one year before you can buy a property here.
This was no real surprise. So I decided that we would go to the registration office and find out for ourselves.
This we did. Went to the desk only to be informed we needed a police document confirming that I had first arrived in Nanning over one year ago and also a Chinese translation of my British passport.
A complicated bit followed...My passport expired in June 2007, so in keeping with International rules I needed to renew it before my final trip to Nanning.(6 months before expiry) This meant that all me previous visitor stamps were in my old passport and my new passport only showed my most recent visit.
Are you following me so far?...
So this complicated bit now meant I also needed to provide the police with all my Hotel receipts from the visit one year previous (luckily also I had kept these) and to show my old passport (luckily I had kept it and brought it with me). They then provided me with a handwritten statement declaring I had indeed been present in Nanning one year previous and officially stamped it.
A quick visit to the official translator and after much to-ing and fro-ing my passport was duly translated.
On returning to the property registration office we were informed that as of July 2007 the rules had changed.
You now need to have worked or studied in Nanning for one year to be able to have a property in your name or with your name appearing as a joint ownership. Also, you can only purchase one property.
I do believe the Chinese authorities have it right in this respect.
My wife and I are now half way through buying an apartment in Beihai.
Tips...The three Golden rules applies here also...location, location, location.
Look for popular areas, not just with westerners, be brave, venture out, there are bargains to be had