Real estate: Curbs put on foreign purchasers
By Fu Jing and Liu Jie in Beijing and Zhang Yu in Shanghai (China Daily)
Updated: 2006-07-25 06:45
Foreigners will be restricted from buying property to cool down overseas
investment in real estate, the government announced yesterday.
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Labourers work on the scaffoldings at a construction site in
Nanjing, capital of east China's Jiangsu province July 13, 2006.
[Reuters] | According to a package of new rules, foreigners need to be resident in China
for at least a year before they can buy homes to live in; and need to secure
government approval to buy property they don't intend to live in or use.
The residency restriction does not apply to overseas Chinese or compatriots
from Hong Kong, Macao or Taiwan who can buy houses for their own use.
For overseas real-estate developers, the ratio of registered capital should
be more than 50 per cent of any project that surpasses US$10 million.
The Ministry of Construction, the Ministry of Commerce, the National
Development and Reform Commission and the People's Bank of China said the rules
are part of government efforts to regulate the real estate market and to improve
the efficiency of foreign investment.
"Governments at various levels should realize the potential problems relating
to excessive overseas investment in real-estate development," said the
statement.
The number of newly-established foreign-invested real-estate firms increased
by 25.4 per cent in the first half of this year, compared with the same period
last year. The amount of foreign capital actually used in the sector was up 27.9
per cent.
The number of new construction projects jumped by 22.2 per cent in the first
half of the year, fuelling a 11.3 per cent rise in economic growth in the second
quarter, the highest rate in a decade.
The government has tried to rein in the property sector by raising interest
rates, tightening lending rules and imposing strict controls on land use but
apparently with little effect.
According to a recent report by DTZ Debenhan Tie Leung,
a London-based property consultant, overseas investors bought US$4.5 billion
worth of property in the first quarter, nearly a third more than the whole of
last year. Beijing and Shanghai are reported to account for more than 80 per
cent of overseas purchases.
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