These years, all China is talking about that Wenzhou people are able to buy lot properties. We do see many Wenzhou investors' group to go to other cities to buy real estates, and they often buy many properties at one time. At the moment, a real estates trade fair is hold in Wenzhou, and many real estate developers decided to come to Wenzhou for trying their fortune, but they also that what will be the purchasing capability of Wenzhou people?

	Wenzhou real estate trade Fair

The organizer of this trade fair told, real estates project from other cities had sold 130millions in this fair. To compare with 5 years ago, we did not see many other city's real estate company to come to Wenzhou's trade fair, nowadays, Wenzhou trade fair has become to a national wide real estates exhibition. But why real estates company all come to this small Wenzhou city to show their projects?

Journalist:: " this is live report of Wenzhou real estates trade fair, today, there are 97 exhibitors to show their projects here, but non of them are from local Wenzhou, they all came from other cities of China, it seems all China's real estates projects are gathering here and want to sale to Wenzhou people.

Reporter sees that 40 of the real estates exhibitors came from Shanghai, others are come from Chongqing and Xiamen of South China, Wulumuqi and Baotou of North China etc;

Staff of Wenzhou real estates trade fair: " the exhibitors came from more then 10 provinces of China, but the show point is still the Yangzi river area".

There are 40000 people visited this real estates trade fair, many of them had signed their draft buy contract at set.

Wenzhou real estate trade fair: " the sale is very good today, it is out of blue, Wenzhou investors are in high investment mode.

Most of the investors are from local Wenzhou. People usually buy from real estates that are close home, but why Wenzhou people are interested in properties outside Wenzhou?

Journalist: "why do you come to the fair?

Buyer: " I come for investment, because the money is not secure if just hold it in hands,

Journalist: " will you sell it out after this buy?"

Buyer: " I will rent out first to make some money then sell it". most Wenzhou people like to trade real estates.

The journalist did a survey among the investors, 90% of them buy the property for investment purpose, if let them chose, they would like to buy bit lower priced from properties outside Wenzhou then the high priced local property. they also like to buy residential or business used real estates which has potential of value up. There are 40% of them had bought at least one or more property outside Wenzhou, 72% of the visitors to this exhibition had been travel and look for real estates in other cities.

Buyer: " I have looked real estates of Hubei province; Subei, Jiangxi province and Shanghai.."

Ms.Jang is an accountant of a Wenzhou company; she is interested in a shop type property in Shanghai, and wants to make a reservation.

Ms.Jang:" this property's price is 600000yuan/M2, the first payment is 40%, so I only pay around 200000 yuan first, then rent it out. I will get a rental income 4000yuan /per month, but the mortgage of this property is 3100yuan/monthly for 10 years, thus, I will have 900yuan/month profits.

For Ms. Jang, if she to spend 200000yuan in this property can have a stable 900yuan profits/month, and, if the property value goes up, she also can sell it for more, thus, the risk of buying this property is not much.

Journalist: " are many people around you doing the same?"

Ms.Jiang: " yes, many investors, Wenzhou people are very smart.

Journalist noticed the fair just opened for half day, a exhibitor already put the "all sold out" sign out, he sold 38 properties worth 30 millions Yuan ready. .

Exhibitor: what I sold here is equal my 3-month's sale figure in Luoyang city.

Staff of Wenzhou real estates trade fair: " Wenzhou people have money, thus other city's real estates companies regard Wenzhou marketing as their second distribution marketing.

The investigation of Wenzhou people's heavy investment in real estate

There is a history of Wenzhou people invest in real estate. in 1990's , some wealth Wenzhou people bought properties then sell out later, they made profits from real estates business, soon, more and more Wenzhou people come to the team of real estates business, since that time, Wenzhou property had gone up to 6000yuan/M2 - 7000yuan /M2 directly toward the price trend of Beijing and Shanghai's property. Since knowing the secret of making money from real estates, Wenzhou investors not only made money from the hot sale of local real estate, but also start to develop their investment to other cities. Their first stop is Shanghai, which is not too far away from Wenzhou. The first Wenzhou investors group went to Shanghai by train on 18th of August 2001, there are 157 people on the train, after 3 days in Shanghai, they bought more then 100 properties with 50 millions Yuan investment in Shanghai, to tracking back, this group is the earliest private real estates investors group in China.

Buyer: the investment return value ratio of Shanghai should be higher then Wenzhou at present.

2 months later, a 107 people participated Wenzhou investors group again to fly to Shanghai, they through a 80 millions Yuan order to Shanghai real estate, people said their coming seems like the hurricane that swept Shanghai. Since then, Wenzhou investors group go to Shanghai frequently, till now, Wenzhou evening newspaper has organized 56 similar groups to Shanghai to buy real estates, this is even not including some private investors groups or family managed investors groups.

Wenzhou buyer: " I remember that time we drove 4 cars to Shanghai Kunshan, almost 20 people all bought real estates there, it seemed we went to rob the properties in Kunshan, and no one care of the first 1000000yuan payment, then we did mortgage…

A statistic report from Shanghai commercial chamber described that, Wenzhou people had invested 2000 millions Yuan in Shanghai real estates, Shanghai's property price keeps going up and made the property value return 20% high.

Wenzhou buyer: " we think the real estate business is a quick and high value return business, because the real estate price keeps going up, every time we can make about 100000yuan profits, not thousands yuan, we are not interested the benefit only thousands Yuan.

In another hand, the high value returned real estate business brings more desire to Wenzhou investors. at the same time the real estate business booming in Wenzhou, all kinds of service company established to service between real estate developing company and investors, Wu Yu's company is one of them, this company has been doing this bridge serves for 3 years.

Mr.Wu yu is the Chairman of "Chaoran real estate distribution company", his biggest investment in real estate was 45 millions by his whole family, this big family has 7-8 small families, they invested 45 millions together in Shanghai at one time, this is the special way of Wenzhou people doing real estate business.

After made huge income, Wenzhou investors start to look for other real estate markets in all China. In spring of 2002, Wenzhou investor's group went to North trip - Beijing, their first transaction was 20 millions Yuan, this event made a big wave in Beijing. Media reported as "the Wenzhou hurricane swept Beijing" and " Wenzhou investors' group measures other city's real estates markets".

The following up, Wenzhou investor's group traveled to all China continually.

In August 2003, Wenzhou investor's group invested 32 millions Yuan on real estates of Xuzhou city.

October, 40 Wenzhou investors invested 40 millions Yuan in Wuhan real estate markets, they made the Wuhan real estate market to top hot.

At the same month, 40 Wenzhou investors went to Qingdao, they made 25 millions Yuan transaction within 2 days in Qingdao city, the Qingdao peninsula city newspaper reported that " Wenzhou people spent millions to buy one street of Qingdao". .

In November, a 80 Wenzhou investors group went to Shenzhen, they invested 60 millions Yuan in Shenzhen's real estate market.

Till now, Wenzhou investors groups have been to all over China, North to Shenyang, South to Hainan, West to Chengdu and East to Shanghai. There are almost 100000 Wenzhou people are doing real estate business by using 10 billions Yuan civil capitals.

There is no one can tell that How many exactly Wenzhou investors group are doing the real estate business in China? But Journalists of "Economic 30 mints" of CCTV found almost every Wenzhou people they met has some keys of properties they bought from different cities.

Journalists of "Economic 30 mints" also found, beside above, Mr.Wu wants to buy some real estates at this exhibition. tomorrow, he will fly with an investors group to Chongqing city to look other real estates, if some thing interested, he will sell what he has now then buy new properties. Investors like Mr.Wu are just ordinary investors that buy lower price and sell higher, he is not the hot real estates business player yet, then how to make money from real estates?

The story of Wenzhou real estates investment

Wenzhou people are famous in investing in real estates in China; Chinese call them " the killer of property". But they are not the "killer" of making pricing down, in contrary, they usually make price up wherever they go.

After year 2000, the lower part of Yangzi river area has become the hottest cities for Wenzhou investors groups to buy real estates, these cities are: Shanghai, Suzhou, Hangzhou, Xiamen, Nanjing, Jiujiang, Yangzhou, Zhenjiang , and the price of real estates in these areas had kept up for 3 years.

Wenzhou investor: "before June of 2002, the real estate price in Shanghai is bit more then 5000yuan, now has doubled to 10000yuan, so we had good harvest from buy and sell real estates in Shanghai.

According to investigation, the profits return value of Wenzhou people invested in real estates is more then 20%, they also can obtain mortgage loans easy from bank by investing in real estates, they think that there is no big risk doing in this way.

Some small business owners of Wenzhou are the earliest investors among Wenzhou people. Mr. Wang is a glasses shop owner; he started his investment in real estate like the story below:

Mr.Wang: "it is hard to operate and make profits from small business, but real estate has quick and high profits return value."

After 2001, Mr.Wang bought 4 properties in Taizhou city and made good profits.

Mr.Wang: invested one million Yuan, the value increased to almost one million Yuan as well.

In 1980's, the development of many small industries in Wenzhou had bought Wenzhou to economic prosperity. But when coming to this century, the material and labor costs are much higher in Wenzhou to small manufactories then other cities in Zhejiang province, thus, the old style of small operating manufactory of Wenzhou has lost its advantage to their competitors, this situation made many small manufactory business turn their investment to other projects.

Wenzhou investor: "Wenzhou has huge civil investment capital, it may be more then 20 billions Yuan.

All real estates projects among Yangzi river area (including in Wenzhou) are going very well because of the huge investment in this area. Wenzhou city development authority reported that since year 2000 till now, investment in real estates in Wenzhou kept its high increasing always, the average increasing rate is 31%, the price of property keeps going up, the same area's commercial property increased 17% in year 1999, 20% in year 2000, 23% in year 2002, the average property price increasing rate is 15%.

Shanghai "Xiangmei garden" real estate project was build in 2001, these residential properties are located in Shanghai Pudong area, they did not attract Shanghai people before its construction finishing. The real estate developer of "Xiangmei garden" thought may be should come to Wenzhou for a trying; this is one example of the earliest housing developer who came to Wenzhou to try their luck.

Real estate developer: " we sold 40 properties within 3 days, this means we sold almost one building out, this Wenzhou marketing is very attractive".

1.8 millions Yuan/per apartment is the average price of this residential area, we sold one building at one exhibition, this real estate company smelled to bank. Till now, the total 5 building with 200 apartments all sold to Wenzhou people.

Prove of Wenzhou people's investment in real estates

While seeing Wenzhou investor's huge investment in real estates, one must attempt to try the same. But one of the questions is: are all these investors millionaires? Journalists had met many Wenzhou investors, in fact, many of the investors are not very rich when they started, many of them are just have a formal job and take salary only, for example. Ms.Liu is an investor of real estates, she also is a staff of a local hotel, she started to invest in real estates is because she is influence by her sister. Ms. Liu's sister bought a house in Shanghai for the convenience of her kids to go to school in Shanghai, in few years later, she sold the property and made more then 100,000 profits, since this, the Liu's whole family started to invest in real estates.

Journalist: "how did you buy the first property?"

Investor Ms. Liu: "because my hometown is in Haining city, so I bought my first house in Hanjing.

Journalist: "how much did you pay for it?"

Investor Ms. Liu: " about 1200 Yuan/M2 3 years ago, now it is 2800yuan/ M2.

Journalist: "will you make profits"?

Investor Ms. Liu: "yes, absolutely, I tried to sell it in real estates trading place, some people want to buy, but I did not sell it as it may be still having a developing room ."

Journalist: "How big do you think this rook is?"

Investor Ms. Liu: "I think it will increase between 10 -30%"

Journalist: "are you waiting for it now? "

Investor Ms. Liu: "I think its increasing circulation time is about 3 years, this is because the location of my property, this is related to transport. I think after that big bridge built up, and other regulatory finished, then that will be the top point of the value.".

Journalist: " how do you decide the up and down of real estate business?

Investor Ms.Liu "we general look at where the property come from, the first to look government's regulation in this city, it is sure that to follow up wherever government moves, because government always moves to a good area, then that area will be hot.

Journalist: "what is your price line of selling your property?

Investor Ms.Liu: "up to 4000yuan."

The link to Real Estate Service Companies.

If Ms Liu's wealth is from invest in real estates, then what about many don't do real estate business but also made lots of money. One example is the local newspaper, local people comment: " if one wants to know how hot the real estate business in Wenzhou, he can just read some big local newspaper, because almost half of their advertisings are real estates ads from other cities, newspaper's profits from these ads is 20 millions/year." Thus, there are many kids of real estate service business established, a new worlds - "real estate trade industry" has produced by people in Wenzhou.

There is a place in this fair has attracted Journalist of "economic 30 minutes" of CCTV, the journalist noticed this is not exhibitors stand but "Wenzhou evening newspaper", they are organizing investors group to go for look at other city's real estate. This time they got 80 people and divided them into 4 groups, they are going to different direction, Chongqing, Chengdu, Nanjing and Shenyang. Wenzhou evening newspaper is the first to start organizing the investors group to Shanghai, the head of real estate office of Wenzhou evening newspaper - Li Haiyan was also the group head of that first trip to Shanghai.

Li Haiyan: " we did the first Wenzhou investors group on 18th of August 2001, that time we had 157 investors to Shanghai, because too many investors, I had to use horn in case people can not hear my voice."

Within 2 days, the 157 investors bought 49 properties, worth 50 millions, this is the first gift of our group to Shanghai, since that time, Wenzhou evening newspaper has organized almost 100 group to Shanghai, Beijing, Hangzhou, Qingdao these big cities, total transaction worth about 1000 millions.

Li Haiyan: " if you advertising in my newspaper, I will bring the investors to your project."

Within 3 years, there are 6000 investors participated these groups, they are from private business owner, salary workers, retired people etc. Li haiyan even made a real estate investor's club,.

Li Haiyan: "to register a member in this club need to fill in a form: Name, occupation, yearly income etc. we divided the investment type in groups according to the areas and sizes they want to invest, also how they like to invest, eg, to do full payment once or by mortgage payment method.

Li Haiyan regards the 6000 club members as her newspapers big treasure, and the attraction to real estates providers.

Li Haiyan: "now many real estate developers come to us, because we have the full information that are clear know what Wenzhou people likes without doing marketing research.

We are not only organize the group to see real estate company's projects, but also make showrooms at the first and second floor of our newspaper building, this is a gift for those real estate developers who pays about 300000 Yuan/ month advertising fees to our newspaper.
Jinhua city's exhibitor: " We brought 100 properties to this exhibition, we have sold 90, not much left".

Wuhan exhibitor: "we sold 80% of our properties, 60% buyers are Wenzhou investors".

Wenzhou evening newspaper made lots of profits as its one hand has 6000 investors, and another hand has many real estate developers from all China. To look at the real estate weekly column of Wenzhou evening newspaper, we found most of the ads are from other city's real estate projects, this real estate weekly has 8 pages, every page can make 90000yuan from ads, and at least every weekly has 4 pages ads and the profits is around 400000yuan/week, this is the top local newspaper.

Li Haiyan: " our real estate ads profits is 1/3 of our whole newspaper's advertising profits, we made 20 millions in 2003, most of these are coming from real estates advertising. before this, we have to look for companies to do ads on our paper, but since we can help real estate company to make profits, both sides are in the same position, then our profits is easy to make now.

Along the booming of Wenzhou real estate, there are many real estate distribution companies established as well in order to making profit from the real estate booming too. a joke described these service company as their numbers are as same as investors groups in Wenzhou.

Beside and at the same time, many also worried the result of this over hot real estate business in Wenzhou.
Analysis from Experts

Some body described Wenzhou real estate phenomenon as it may divide in 4 marketing grade: first grade marketing is real estate price over 5500yuan/M2 , these are including: Shanghai, Hangzhou and Beijing ; second grade are areas that price between 4000-5500yuan/M2 , cities are those economic developed coastal cities like Dalian, Qingdao, Nanjing etc; the third grade is the real estate price between 2500 - 4000 Yuan/M2 , and the cities are capital of provinces, such as Wuhan, Changsha, Chengdu etc; the fourth grade marketing is the price between 1000 - 2500 Yuan/M2, , the areas are some regional cities like Huangshan of Anhui province, Jiujiang of Jiangxi province so on.

China real estate industry paid high attention to this Wenzhou real estate phenomenon, what is the result of this over hot Wenzhou real estate business?
Mr.Gu YunChang ( the deputy head of China real estates association) :" we noticed some thing interesting of the Wenzhou investors group, it seems they have investment routes, for example, Yangzi river and Shanghai area are where they go most, and real estates in these area have potential of pricing going up, because these area's real estate's original prices are lower, people's income are higher. Another potential is when the demanding of the land is insufficiency, the price will go up, therefore, these areas are where the real estate business people like to look into.

Journalist: "well, what is the exact influence if the real estate price going up".

Mr.Gu YunChang: "the pricing can not always up, this is linked with purchasing power, if the purchasing power is less, will not be good for developing real estate industry, this is why government want to balance the price. With regard to the Wenzhou real estates investors, there are no law to say that they can not do invest in real estate business, in contrary, some cities would like them to invest there, but the investment portion can not be too big, experts said should be within 20%, if over 20% then will be some risks.

Journalist: "What are the risks?

Mr.Gu YunChang: " we call the risk "foam economy", the high price will make foam."

Journalist: "how do we know if the foam is coming up?

Mr.Gu YunChang: "if the area has the phenomenon that real estate price keeps going up but rental rates keep going down, this mean the foam comes".

Journalist: "is there foam now? "

Mr.Gu YunChang: some local has the foam, but not very big to lead a break yet."
Journalist: "what will be the result if the foam break?"

Mr.Gu YunChang: the result will be the price of real estate crashing down. Hong Kong has this from 100% down to 31.8%, means the value of 10000yuan is only worth 3200yuan."

After expert's words, people start to worry, once the price going up to unpractical stage, the high priced real estate will become the trouble of buyer, then the lose will not only to a buyer, but also to the bank, the whole marketing will face the crisis.

The society has paid more attention on this Wenzhou real estate investor's phenomenon. It will be worth to study by the real estate authority of government that how to guide these investors to do a proper real estate marketing investment and keep our real estate marketing in a stable position.