Aviva warns of Chinese residential property bubble

Aviva real estate product strategy director Chris Laxton has warned that the China residential property market is in a bubble which could last five years.

Speaking to Money Marketing at the Cofunds economic forum last week, Laxton said the £317.9m Asia Pacific property fund has no exposure to China. He adds he is only looking at commercial property exposure for bespoke portfolios for institutional clients.

He says: “The residential property market in China is in a bubble and will continue to be so. The residential market is very high risk. So much money is invested into it on speculation.”

He says the Asia Pacific property fund will not invest in Chinese property over the next five years. He says: “Before we invest in China, I would like to see political certainty, robust valuations and confidence in those valuations.”

Martin Currie’s investment director for China James Chong says the Chinese government is trying to control the property market by raising the deposit required when buying a second home from 50 to 60 per cent.