Real estate companies in China are announcing expansion plans despite a slowdown in the number of foreign investors in the property market.

They are betting on real estate becoming more affordable and citing the first green shoots of recovery in the Chinese economy as a sign that their instincts are correct.

The latest research from Colliers International showed that local investors have dominated Shanghai’s real estate investment market in the first quarter of 2009 while foreign investors continued to slow down their expansion plans.

The first quarter witnessed more local insurance companies entering the direct real estate investment market and aggressive acquisitions made by state-owned enterprises.

Colliers said the forthcoming trend is that more local investors will jump on the bandwagon in the investment market during 2009. Also sales volume of residential property in Shanghai bounced 20% in April from March, and surged 84% from a year earlier.