China's overseas house purchasing power is becoming more prosperous as it is expected to hit 5 billion yuan ($750 million) in 2010. However, most of the well-heeled purchasers don't know how to evade risks when they grab properties in Western countries, China Economic Net reported Monday.

China's real estate agencies have found their overseas business increased about 35 percent in the first 10 months of this year, and they said the 5-billion-yuan estimation is merely a drop in the ocean for the entire market.

The investors include entrepreneurs, professional investors and parents whose children are studying abroad, according to the agencies. More than 80 percent of the buyers will purchase a property without seeing it, the report said, adding that almost all of the buyers make the purchase as an investment.

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Canada, Australia, the UK, the US, Germany and Singapore topped the list of favorite house buying destinations among Chinese investors, but few pay attention to the real estate tax policies in those countries, the report said.

Besides tax policies, house value depreciation and exchange fluctuations are also threatening the security of Chinese investors' overseas properties, the report said.

Industry insiders suggested that investors have to follow different investment patterns in different countries. For example, location is the most important factor when buying houses in China, yet some other factors may be much more significant when the deal happens in the US. For example, with the decline of the auto industry, house prices in Detroit have slumped, insiders explained.

In addition, insiders also warned that the lump-sum payment should not be the first option when making overseas property investments, as the new owners may find it hard to resell or lease the house after they've signed the deal.

Therefore, it is safer to seek bank loans because banks will evaluate the property before granting loans, and houses with no appreciation potential usually cannot get loans, the report said.