In China, buying property has become as easy as sitting in front of a PC, going to a certain website, and clicking on one's choice of property. Internet real estate transactions in China has become the new norm, Business Times reported. Companies like Oaktree Group LLC and Bain Capital LP, both funds companies, have also weighed in on the ongoing action.
Those groups have already helped people and banks who are debt-ridden lose some of their assets. The same is happening with Alibaba Group Holding's Taobao auction site, which experienced a growth of 88 percent from last year. This happened as they started to work alongside local courts and asset managers with clients looking to off-load properties to pay off their debts.
The properties, known as 'distressed real estate,' have been sold off in online sites, where the listings have managed to create a surge to the tune of 1.3 trillion yuan (US$188 billion). The data was collected by realtor Seatune Show.
Asian Correspondent reported on the curious situation, citing that global funds Oaktree Capital Group and Bain Capital was probably the main reason why most investors have started to hunt for properties online. It was probably also the reason behind people and companies selling their assets online in return for a significant profit to pay off debts.
Taobao had been a great help for these investors, who are looking for affordable assets to acquire. These assets lie in wait with debt-ridden institutions, real estate firms who held them for others, and people who were looking for a quick turn-around.
There was also a significant discount offered by online sites if people bought off them. Cited as an example is the case of a two-bedroom apartment in Shanghai. It went for around RNB 10 million (US$1.47 million) with a 44 percent discount when brought off Taobao. Another unit that featured chandeliers, marble floors, and sweeping staircases sold at RNB60 million (US$8.6 million), a price that's been pointed out to be lower than most market prices.
As with most cases, these assets are distressed properties, which has been sold off for about two-thirds of its market value or more. Bidding might push most of these prices up 90 percent from the opening value, but even at 90 percent from that price, buyers still pay less than half of what the properties' real price is.
Online sites have been popular since properties that aren't listed on it tend to fetch higher prices with additional taxation costs.
