The upcoming Beijing Real Estate Trade Fair will see properties in Detroit on offer, as the US city's housing market has caught the attention of some wealthy Chinese investors, the fair organizer told the Global Times.
"Out of the 15 US real estate agencies at the fair, there will be one from Detroit," Wei Kefei, a member of the organizing committee of the property fair in charge of overseas real estate exhibitors, told the Global Times Wednesday.
Detroit property has become an eye-catching topic following media reports that Chinese people have been seeking bargains in the city, where home prices have been plummeting. A real estate investor who bought 363 properties there claimed that she acquired one house for just $500, according to a recent CCTV report.
"Some people did rush to buy houses in Detroit, betting on the US economic recovery, which they believe will boost development in the auto industry and the auto city as well," Wei noted.
"The city is seeing a resurgence … so it seems to have great potential," John Holsapple, director of investment consultancy Sterling Pacific, told the Global Times Wednesday. "And the cost of entering the local market is very low compared with other cities like New York and Chicago."
But Wei pointed out that the city is not a mainstream place for Chinese people looking abroad for property investment, and it could be risky to buy a low-priced property in Detroit considering the local taxation on property ownership.
Furthermore, Detroit is facing major economic and infrastructure challenges.
The governor of Michigan has assigned an emergency financial manager to oversee a major restructuring of the city and the results of this are uncertain, said Steven Lawson, CEO of Windham Realty Group China, a company that provides US real estate investment consulting and brokering services for Chinese buyers.
At the moment, the company is advising clients to hold off from investing in residential real estate in Detroit, as there are too many uncertainties, Lawson said.