"The government has already met its goal curbing the excessive price growth," says Carlby Xie, head of research at real estate consultancy Colliers International in Beijing. For the first half of 2012, he adds," the demand was organic and healthy, mostly sourcing from owner-occupancy and that being catalyzed by the continued growing urbanization in many cities at tier III or even lower-level tiers."

It would be hard to imagine a China that discouraged new construction.

Developers are often owned by governments, which can make money fast by selling units even before they're built (Chinese often buy on faith, calling their flats "air houses" before they're built). Permitting offices are known for taking kickbacks, ensuring local officials a flow of extra income. Chinese have nonchalantly wrecked and rebuilt stuff for most of their history. Famed Beijing landmark the Forbidden City is a classic case.

The pursuit of new property also complements an aggressive quest for new infrastructure. Why build an airport in the desert or a superhighway to a cluster of remote farms?

Major American real estate builders are on China's blueprint.

Simon Property Group ( SPG), which calls itself the world's largest shopping mall owner-operator-developer, agreed in March with China's biggest retail developer the Bailian Group (Shanghai trading symbol 600631.SS) to build a mall next to the Shanghai Disney Resort.

Taubman TCBL, a year-old China-based subsidiary of Taubman Asia-- itself a subsidiary of Taubman Centers ( TCO) -- said last month it had formed a joint venture with the Beijing Wangfujing Department Store Group (trading symbol 600859.SS) to take a controlling interest in a mixed-use shopping mall in Xi'an, population 8.5 million.

Retail and residential projects should give the best returns to foreign builders, Xie of Colliers says, particular in mid-sized cities around Bohai Bay, in the Yangzi River Delta and out west in cities such as Chengdu and Chongqing.

Share prices of both Simon Property Group, an S&P 500 firm, and Taubman Centers have risen steadily since the global financial crisis and stand five or six times higher than their pre-crisis levels.

Share prices of North American property firms are generally strong, as their projects are supported in some cases by U.S. government stimulus measures, mortgage reduction plans and monetary easing. But watch for a market correction, advises Wojtek Zarzycki, managing director of Optimal Investing in Toronto.

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