The Chinese real estate industry is a significant contributor to the country’s economy, accounting for a large portion of its GDP. This sector has experienced steady growth due to government support and market liberalization. By 2023, the total revenue of China’s real estate market is expected to reach $2.73 trillion. Due to China’s vast size and extensive urbanization, the real estate industry in China differs significantly from that of Western countries such as the US and Canada.
Our company has been involved in successful real-estate lead generation projects for years while also being experts at understanding what it takes to succeed within the Chinese market! In this article, we are sharing knowledge on real estate in China, based on our experience as well as insights into future trends within China’s flourishing real-estate (investment) market.
Real Estate in China: Overview of China’s real estate market
China’s real estate market is one of the largest in the world, with nearly 100,000 developers and over 2.9 million employees. Real estate sales revenue has increased tenfold since 2005.
Housing prices have doubled in the past decade, with the average sale price per square meter increasing from 3.8 thousand yuan in 2008 to over nine thousand yuan in 2019.
Different regions have experienced varying price growth trends, with Beijing and Shanghai having the highest sales prices as of 2019.
China’s urbanization and increasing GDP per capita lead to a constant demand for new housing, resulting in rising housing prices at a similar rate as GDP per capita. However, some people still find it difficult to buy an apartment.
Real estate is viewed as an investment by many Chinese, who invest a large part of their savings in it, while the government also places great importance on the real estate market.
The real estate sector is an important part of China’s economy, with local governments generating significant revenue from land sales and banks issuing many property-related loans.
The government is making efforts to stabilize the market, recognizing its importance for economic stability.
The Evolution of the Real Estate Market in China
Chinese real estate buyers market has experienced significant growth in the past 20 years, with land purchases becoming a source of financial revenue for local governments.
The government has had to restrict investment due to the rapid increase in housing prices, particularly in larger cities.
As China’s economy slows down and the market becomes saturated, there are concerns about a real estate bubble burst.
However, there is still potential for growth in real estate prices in larger cities, especially first-tier cities. Consumers in China are increasingly interested in high-quality real estate products from leading developers.
Real estate prices in many Chinese cities have reached high levels, and it is unlikely that they will continue to appreciate at the same rate as before. Prices may rise at a slower pace or experience moderate corrections during economic uncertainty.
Prospective buyers are increasingly focusing on quality and improving their living conditions. However, the secondhand market and property-related services are likely to continue to gain momentum.
Despite concerns, new regulations by China’s central bank have led to prospective buyers postponing rather than canceling their home purchase plans, which is seen as positive news for the market.
The Impact of Covid-19 on China’s real estate market
To look at the impact of COVID-19 on Chinese property buyers, it is essential to consider some historic patterns. Because of the Chinese Spring Festival in late January, sales are usually slow at the start of the year.
In fact, sales volume for January and February together typically is equivalent to the average monthly volume during the rest of the year.
As a matter of fact, the real estate sector in China was strongly affected during the lockdown and the following months.
However, after the lockdown companies were able to start their business again, recording a slight growth in house prices in the main cities.
According to the official data released by the National Bureau of Statistics of China, China’s real estate investments in the first nine months of 2020 increased by 5.6% on an annual basis, with an increase in investments in residential properties.
Slowly recovering from the Covid-19 pandemic, China saw its growth skyrocket to 38.3% between January and February 2021.
Recent changes in China’s real estate market have largely been driven by Beijing. Recently, the central government has taken a very cautious approach to this industry out of fear that it is overheating.
The state has instead focused on promoting economic growth elsewhere while waiting for the macro economy to recover before giving attention back to this sector.
When things do improve though, it will happen quickly with no need for any targeted stimulus from authorities at all.
Real Estate Companies in China
In this really competitive market, a few companies were able to stand out, each generating millions of dollars.
When it comes to real estate development, China’s largest company is Kaisa Group Holdings Ltd. In 2022 alone they generated a sales revenue of over $2,797 million dollar; their closest competitors were Guangzhou R&F Properties Co Ltd, Yunnan Health & Cultural Tourism Holding Group Co Ltd, and Zhuhai Huafa Group Co Ltd.
Growing Investment In Foreign Real Estate
Preferred Investment locations
Chinese investors are still interested in investing in the United States despite recent commercial issues. 25% of foreign investment in US residential real estate came from Chinese buyers.
However, Chinese investors are starting to shift their focus from the US Pacific Coast and California to other locations such as Singapore, Portugal, and Australia.
It’s not only Chinese investors that are buying properties, but also Chinese companies that are investing in overseas offices. In general, overseas investment returns are better than investing in China. The US attracts a lot of foreign investors and the Chinese are investing heavily, especially in major cities like New York, Miami, and Los Angeles.
The outbound foreign direct investment (OFDI) from China has grown dramatically in the last decade, going from virtually nothing to over $100 billion per year.
OFDI (Outbound Foreign Direct Investment)
China’s strategy for international expansion has led to a surge in outward foreign direct investment. Despite this, China ranks third in the global FDI market behind the US and Japan.
Chinese OFDI has its own characteristics, such as companies with no apparent advantage investing in developed countries to grow their business strength.
Investment in overseas residential and commercial real estate has reached a record $33 billion, increasing by over 50% in 2016, accounting for a third of total OFDI. This investment strategy is seen as lucrative and safe for Chinese buyers due to rising standards of living, priorities around education and lifestyle, and a depreciating Yuan.
There is no doubt that China will be a major mover of capital into Real Estate for many years to come but how do you attract investment to score a slice of this pie?
Reach out to China Real Estate Investors: Online Leads/prospect Generation
China has a 65% internet penetration rate with over 1.05 billion users online, including 350 million middle-upper class individuals who are active daily.
To attract investment from the top wealth bracket, a comprehensive digital strategy is necessary due to the unique conditions of the Chinese market.
The development of digital technology coincided with the accumulation of wealth in China, leading to a shift towards online research for investors.
A different approach to the Chinese Real Estate Market
In China the answer for lead generation is digital, this is one of the most online-centric environments in the globe & investment is no exception, there is a strong culture of online research with the average user spending 1.5 hours per day browsing for information.
The traditional commissioned focus sales network of agents is not redundant in China. Indeed an online strategy supports their sales efforts BUT relying solely on third-party sales certainly has its issues.
Chinese Sales Agents don’t do Marketing
Firstly sales agents do not do digital marketing, they build offline networks which severely limits exposure without an online presence.
It is difficult for an agent or real estate developer to sell a project in such an online-focused society without online exposure, even after a personal recommendation Chinese investors will typically research online via Baidu.
Real Estate in China: Working with a local partner = a lack of control
Secondly, we have heard countless complaints first-hand of a ‘race to the bottom, that is poorer quality service, price-cutting, and ruthless sales tactics at any cost.
Outsourcing to third parties in this way does not allow serious real estate professionals control over customer service, their brand image, or management over further prospective buyer references.
Direct leads generation & digital marketing is the most efficient approach in China
In China, the best use of sales agents is to support direct online lead generation. The figures speak for themselves, a comprehensive campaign can drive 100 leads per month, and a sales agent typically provides between 1-3.
You also then have control of customer service and the sales conversion process, many firms such as DAMAC, RS Properties, and Douglas & Elliman all built Chinese customer service teams to handle conversion directly. Higher lead figures & direct, in-house sales increase the likelihood of conversion.
Direct lead Generation = more control
The discerning investor buys into the reputation of your brand. You need to be reputable and visible on the right platforms, direct lead generation via your own website and accounts allows you to control that first impression (you are not just a page in a portfolio), rather you have a strong identity in your own right.
Referrals will benefit you in the Chinese Real Estate Market
Over-reliance on sales networks can be dangerous for any serious Real Estate firm seeking to seriously penetrate this market.
Building a Chinese customer service team in-house allows you to control communications, importantly you can also benefit from investor referrals and re-direct interested parties for your own listed projects.
A third party, the sales agent has no loyalty to provide referrals to you, rather they remain a gatekeeper with the power to push sales in one direction or another, most typically just based on commission. To take the most referrals you must increase commission rates.
Use digital tools to be successful in China’s real estate industry
One of the key parts of your brand is its reputation. It is undeniable that all around the world a brand’s reputation is important and can have a significant impact on your sales, but it is even more important in China where everyone is always connected to the internet. With your online presence comes your e-reputation.
In fact, investors are not only buying your properties, but also the reputation of your company. Your brand needs to have a strong identity and you need to be visible on the right platforms.
Real Estate professionals need a Chinese website
Having a Chinese website is one of the first steps in your digital strategy if you want to do business in China. It’s vital that it be written and formatted for simplified Chinese because most people from there are not fluent English speakers so they won’t even look at it otherwise! And, this is also an important step to rank higher on the Baidu search engine results page (SERP).
If you can, why not try to optimize your website for computer users and smartphone users? In today’s society, most of the Chinese population is using their smartphones as primary online research tools.
Lead Generation: Contact Form
The two main ways to make contact via the site should be a traditional ‘lead generation form’, in China it is also advisable to embed QR code links to drive traffic directly to your WeChat account as an additional method of contact.
You can also note the benefit of the ‘Baidu Live Chat’ Tool. This allows you to make contact while investors browse your content, portfolio, etc. Rich content equals longer time spent browsing and a greater likelihood of contact via live chat tools.
Lead Generation with Baidu SEO
Search Engines are the heart of Chinese Real Estate Researching. Baidu rankings are as important as your Google ranking. Search on Google and you will find only the most reputable players in the industry in the natural results, in China, it is no different.
As the most popular search engine in China by far and the 5th most consulted website in the world, Baidu is simply a step you can’t skip in China if you want to sell real estate.
You must know that 75% of all property and investment research is carried out via Baidu.
In order to master Baidu, you will need first to optimize your website for it to be ranked on the first results of Baidu.
Moreover, you can also display and advertise your company as Baidu is like an open window on the internet.
Your website will have to be optimized & audited on the ‘back end’ (meta tags/descriptions/titles, etc) for the most effective SEO (Search Engine Optimization).
Tips to rank on Baidu:
- 8-10 pages
- Keyword repetition in line with selected keywords
- A static site, i.e avoid videos and complex graphics
- Internal links to other relevant pages
- Clear and interesting content
- You can also put your Wechat QR Code on your website
How do you rank higher in the natural results on Baidu?
- Content is king, quality Chinese content is rewarded with higher positioning
- Backlinks are vital, other reputable sites with the ranking need to link to your site
- Meta Tags/Descriptions/Title Keywords need to be in-line
Natural results are where the most serious prospects are generated. Discerning investors will research via Baidu extensively before coming to any decision.
If you want more information about Baidu, you can check our complete guide on Baidu SEO. Also, if you have more inquiries or questions, do not hesitate to contact us.
Promote your Real estate Agency in China with Baidu Paid Ads
Why such an emphasis on Baidu? Because it’s a powerful portal for investors, especially wealthy Chinese looking for international real estate properties. Consider that 75% of all property and investment research is carried out via Baidu. This is China’s largest search engine and you must be highly visible and reputable here.
In Real Estate PPC (Pay Per Click) is actually very effective from our experience. It drives highly qualified, knowledgeable, and specific inquiries. Think middle to bottom of the lead funnel.PPC will place you at the top of search feeds based on a pre-determined selection of Chinese keywords.
With PPC the most important aspects to consider are:
- Keyword Bidding Prices
- Link Monitoring
- Ad Copywriting
- Quality Feedback, Reporting + Analysis
There have been fears in China of ‘click fraud’ (i.e. competitors falsely clicking on web pages to drive up numbers). A quality agency needs to monitor click-through rates to ensure they do not suddenly ‘spike’ or dramatically alter.
WeChat – a nurturing tool for your real estate leads
WeChat is a must-have for every real estate agent as they will mainly communicate with their customers on WeChat.
Chinese do not use emails as much as we do, most communication is done via WeChat. On Chinese real estate portals like Anjuke.com & Fang.com, 95% of Chinese investment inquiries leave WeChat contact details instead of mobile numbers.
Post properties for sales or market updates on your feed for potential buyers and investors. They will be able to chat directly with you in private, in group discussions, but also by sharing moments on Wechat.
As a matter of fact, WeChat is the best way to access new markets and clients, as well as to form good public relations.
A good tactic for marketing real estate on your WeChat is to provide information about your company and the kind of properties that you sell. It is also a great platform to communicate with people who may have questions or queries about your firm.
Once potential clients have contacted you by scanning your QR code, you will be able to:
- Send portfolios / talk about investment opportunities
- Send property floor plans
- Send short videos to present your properties
- Audio/video/text message prospects
Chinese consumers differ massively from other consumers and when it comes to large investments such as real estate you should not underestimate this fact. If you decide to use Wechat for real estate, you should not initially start with the investment.
A lot of Chinese consumers will want to invest because of the school’s localization or because of lifestyle.
So, when posting on WeChat it may be good to start with posting about the area or the school localization.
Schools are a great way to attract Chinese consumers as education in China is one of the prior factors when buying a house.
In order to attract new consumers, your posts should be interesting and well-written. WeChat H5 campaigns can be used as an effective way to engage with consumers and promote a company.
A WeChat H5 campaign is interactive, for example, H5 can include external links, videos/audio, links, and mini-game…
Zhihu: The largest Q&A platform in China to Promote your Real Estate & Properties
When it comes to seeking investment opportunities there are many forums popular with the Chinese. These forums often take the form of a Q&A format with users posting questions for others to answer.
In forums such as Baidu Tieba, Baidu Zhidao, Zhihu & Tianya you can create a positive reputation through user-to-user discussions.
Zhihu is a Chinese Q&A platform launched in 2011, with more than 200 million registered users and 120 million answers. It is known for providing high-quality questions and credible answers, and is the largest knowledge-sharing community in China.
The tagline “Discover a bigger world” is a valuable source of knowledge for Chinese netizens. It is recommended to visit the website and advertise your company while looking at different discussions. It can be a powerful tool for selling real estate in China if used correctly.
Why are Chinese Forums effective to sell Real Estate in China?
- There are many specific threads for buying a property in specific price ranges and regions with many targeted buyers both browsing and interacting here.
- Positive comments about your business come from Chinese users themselves, this helps instill trust & reputation.
- Forums rank highly on the Baidu search feed so comments and topics are highly visible.
- Forum reputation is one of the most cost-effective ways for Real Estate projects to improve their standing & reputation online.
More Paid Options to sell real estate in China
Once you have established your company in China and have a Chinese website, it is important to advertise your real estate company to gain visibility and attract consumers.
However, you have to know that instead of using traditional advertising channels, you can also use social media in order to attract new consumers at a lower cost.
Douyin (抖音): Powerful algorithm
As one of the most popular short-video apps in China, Douyin is different from traditional Chinese social media platforms like WeChat and Weibo, in which the content still focuses on text, images, and longer videos.
Douyin can be a powerful tool if you want to promote your real estate agency in China.
For example, you will be able to find some real estate agents giving tips and advertising their company.
However, if you are interested in doing business and advertising your company through Douyin, you will need to have a verified business account. For more information, you can contact us and we will talk about your projects.
Toutiao (今日头条): the best-paid ads app for real estate agencies?
Launched in 2012 and translated as “Headlines”, Toutiao was developed by the same company as Douyin, the Bytedance Chinese tech company.
Toutiao is one of China’s largest mobile platforms for content creation. You have to consider Toutiao as an effective way of gaining Chinese consumers’ attention. In fact, they are spending more time on Douyin and Toutiao than on Wechat.
Besides the most common CPM and CPC, Toutiao provides 4 innovative ways for advertisers to bid on the ad, i.e. oCPM, CPC, CPA, and CPV.
If you want to advertise on Toutiao, there are 4 ways to do so:
- oCPC(Optimized Cost per Click) is the same as CPC with paying per click, yet it additionally introduces an estimated conversion ratio based on audience behavior into its bidding model.
- oCPM(Optimized Cost per Millennium) runs on the same mechanism.
- CPA(Cost Per Acquisition) means advertisers pay only when the conversion(set by the advertiser) is completed.
- CPV (Cost Per View) only supports video ads. A view is counted when the video ad has played for 10 seconds.
Toutiao ads are cost-effective and they have better exposure because they are presented to users as news.
PR is Key to reaching out to Chinese Real Estate Investors
The most important element of a good PR campaign is to localize your project with trending news in China, this increases the relevancy of your message in relation to the reader & dramatically increases the share rate and levels of readership.
In order to run a successful PR campaign in China, you will have to take into account the trending news. As a matter of fact, it will increase the relevance of your posts and increase the share rate.
For example, news can be tied in with:
- Trending Topics & Keywords
- Breaking Chinese News Stories
- National Days of Holiday in China
- Well-known Chinese figures in your field
- Local celebrity endorsements
Be aware that PR is a major part of a campaign, so you will need to hire experts in the real estate industry to ensure that your posts are clear to understand for your Chinese consumers.
Real Estate Salons & Exhibitions in China
Following our experience in this field, it is not recommended to attend this kind of exhibition if you don’t have any visibility online. It will be expensive for you, and the ROI (Return On Investment) will be very low. If you really want to attend some exhibitions, you will have to focus first on your digital reputation on Chinese search engines as well as social media.
Shanghai International Luxury Property Show is one of the most popular exhibitions in Mainland China. It gives exhibitors a direct opportunity to face Chinese high-end buyers.
Each year, the show attracts over 100,000 visitors and over 500 exhibitors who hail from all four corners of the world to showcase their luxury properties and real estate services.
However, you have to know that most of the time, people will only scan your QR code, then leave.
So, those benefiting from this kind of exhibition are those who capitalize on O2O (Offline to Online).
For example, Damac, one of our customers achieved that because he already had online visibility.
The Success of a Chinese TV Series About Real Estate in China
Released in 2020, the Chinese TV drama ‘I Will Find You A Better Home’ (安家) was one of the highest-rated and most popular TV series that year.
It topped viewing charts for Shanghai-based Dragon Television, Beijing-based BTV, and Tencent Video – who exclusively broadcasted it online with daily peaks at more than 300 million views.
The article discusses the importance of homeownership in China, with over 60% of citizens owning a house.
Buying a home is seen as necessary for starting a family, and the TV series “All is Well” had an impact on the real estate industry in China by uncovering the workings of the industry.
The screenplay writer spent 10 months interviewing home buyers for the show.
Then, the show was on trending topics on social media, and as Liu Liu says:‘In the first few days after the series started showing, people told me the property agent industry treats the show as a textbook, learning from it on how to do marketing, sales, and how to grasp clients’. Following the journey of multiple characters, you will not only be able to discover and understand the real estate industry in China, but also some issues that Chinese people have to face in terms of housing, work, and relationships.
China Real Estate Industry Guide: To Sum Up
The real estate market in China is lucrative but highly competitive. Relying solely on sales agents is not enough for long-term growth and brand reputation.
Serious players should invest in their own online growth. It is recommended to hire a native agent to understand the Chinese market and attract new consumers. Having an in-house team is preferable to a third-party sales agent.
We are a China-based marketing agency offering cost-effective solutions to foreign brands interested in tapping into the Chinese market. Our team of Chinese and foreign experts has the experience and know-how needed to succeed in this lucrative, yet complicated market.
Gentlemen Marketing Agency offers many digital marketing and e-commerce solutions, such as web design, e-commerce and social media marketing strategies, localization, market research, KOL marketing, and more.
Don’t hesitate to leave us a comment or contact us, so that we can schedule a free consultation with one of our experts, that will learn about your brand and present you the best solutions for your China market strategy.