Real estate developers in Beijing will have to start attracting more domestic buyers to the market following the city's latest effort to curb speculative property investment by foreigners.
Foreign home-buyers have been rushing to cancel their subscriptions with property developers in the capital in the wake of the announcement of the new rule on Friday, according to a report in the Beijing News.
The wave of cancellations started after the announcement of a new rule requiring foreigners in Beijing to get certificates from the Beijing Municipal Public Security Bureau to prove they have been in China for at least a year for work or study before buying property.
It also bans foreigners from buying more than one house or using a house for anything other than residential purposes.
"About 10 percent of the people who made reservations in the first phase of our project didn't meet the rule, so now we are changing our market strategy to attract more domestic buyers," said Xie Yizhun, sales manager with Dongquguoji Property Company.
Xie's company was not the only one affected by the new rule.
Statistics provided by the Centraline China Property Company showed that about a third of the buyers in the company's high-end property projects in eastern Beijing were foreigners.
"Apart from dwellings, a lot of foreigners buy more than one house at one time as a property investment," said Li Wenjie, the company's general manager.
The new rule was a follow-up on a previous one by the government to curb speculation in the property market. In July, six ministries led by the Construction Ministry issued a statement requiring foreigners to live in China for at least a year before being allowed to buy a house.
Property purchases by foreigners and foreign organizations came to a temporary halt in Beijing following the issuing of the statement.
However, once it became clear that the statement did not include any measures for enforcement, property developers in the capital once again started accepting subscriptions from foreign buyers.
(China Daily 02/08/2007 page5)