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BEIJING-Foreign investors spent $1.44 billion in the first half of the year buying buildings in China, says a new report by CB Richard Ellis. This was 15% higher than the total invested by foreigners for the whole of 2005. But total foreign investment in China’s real estate market is likely to be considerably higher. The figure mainly refers to money used to purchase buildings and does not include purchases of land for development.

A further breakdown of the figures indicate that North American investors accounted for 43% of the property-buying total. North Asian investment increased from last year’s 1% to 24% in the first half year, while capital from Southeast Asia dropped from last year’s 36% to 19%, the report says.

Beijing and Shanghai remain the priority choices of foreign investors. Beijing attracted 49% of the investment, followed by Shanghai with 45%. The percentage of pre-funding of residential development provided by foreigners rose from 7% for the whole of last year to 36% in the first half year. Foreign investors accounted for 42% of pre-funded office development and 12% of retail and hotel investments.

But the report concludes that the amount of foreign investment in China’s property markets is likely to decline following a series of steps taken by the government to cool the heated market.

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