Curbs put on foreign purchasers
By Fu Jing and Liu Jie in Beijing and Zhang Yu in Shanghai (China Daily)
Updated: 2006-07-25 08:37 Andy Xie, an economist with Morgan Stanley in Hong Kong, said there was an
element of speculation in China's real estate market. He said a combination of
low interest rates and expectations of further appreciation of the renminbi have
caused an influx of overseas money.
Some experts said the latest
measures would not have much of an impact on the market.
"The proportion
of foreigners buying houses in China is rather small. And foreigners are
focusing on high-end apartments and villas, a sector with a high vacancy rate,"
said Susan Zhang, national director of Jones Lang LaSalle, a multinational
real-estate consultancy in Beijing.
A Beijing real-estate agent engaged
in property intermediary service said only 10 per cent of its clients are
foreigners.
The purpose of the rules, as Michael Hart, head at Jones Lang
LaSalle's research department in Shanghai, understands, is to "bring greater
transparency to the market" and "make sure investment is longer term, not short
or speculative."
But they might not have much effect because China's
property market is "mostly driven by local buyers and local developers," he
said.
It is generally believed that foreign investment accounts for some
4 per cent of property sales in Shanghai and Hart said the new rules would
have some impact on "a few projects targeting foreign buyers."
Wayne
Zane, director of research and consultancy department in Colliers International
Property Services, Shanghai, said: "It obviously shuts down a door on foreign
investment in the property market."
Weng Haitao, a researcher with the
Shanghai office of Savills China, said some foreign investors may face financial
pressures in the short term because the new rules require foreign investors put
down 50 per cent, instead of the previous 30 per cent, of development costs for
investments of US$10 million or above.
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