Sept. 10 – Beginning this month, a new regulation will require developers to reclaim land from the local arable land reserve or pay local land authorities for the amount of land they reclaim.

It will also allow reclaimed land to be primarily reserved for farmers. The regulation calls for local governments to expand their land reserve bank by reclaiming more land or adjusting the existing land market.

Regions who fail to meet their land reclamation quota will be subject to a cut in construction land quota the following year.

(more…)

Aug. 28 - China has been experimenting in looking to solve its low cost housing market, aimed at getting low-income families on the steps of the property ladder, by piloting an Housing Development Board-style scheme in Changsha.

In the successful Singaporean HDB scheme, Singapore nationals (and other nationalities working/based in Singapore) contribute a percentage of their salary to their individual Central Provident Fund (CPF) account. A portion of this personal accumulating savings can be then used to purchase property as part of the initiative to encourage home ownership in the city-state. At the right moment, the individual can raise a mortgage with a bank, supported by their government backed savings, and obtain a mortgage to purchase an HDB apartment, built by the Singapore government. Such apartments have historically been well made and managed, and sell at premiums later. Consequently, over 87 percent of Singaporean families own their own homes. (more…)

July 11 - Industry experts are predicting that sales of residential houses in China’s southern city of Shenzhen may slip further to prices found 10 years ago.

During the first half of this year, housing prices decreased by 36 percent to an average of RMB11,014 per square meter compared to October’s RMB17,350 per square meter.

Of Shenzhen’s six districts, Bao’an reported the biggest drop in May, with the average housing price reaching RMB10,418 per square meter, down 7.3 percent from last month. In comparison, the average housing price in Longgang District decreased by fell only 2 percent during the same period to RMB8,910 per square meter.

(more…)

Mar. 28 - Land prices in China will rise more slowly this year than in 2007 according to a report from the China Land Surveying and Planning Institute.

The institute, a division of the Ministry of Land and Resources forecasts that measures to curb property prices will begin to take effect, slowing growth in the market.

According to Xinhua, land prices in major cities averaged RMB1,751 per square meter last year, up 13.37 percent from 2006. That year-on-year growth rate was more than double that recorded in 2006.

The State Council issued a circular on land conservation at the beginning of this year that aimed to improve the efficiency of land use and curb speculation. The government also vowed to increase the supply of affordable housing which will help stabilize prices the report stated. (more…)

By Andy Scott 

SHANGHAI, Nov. 15 - The new catalogue for foreign investment, released on November 7, aims to address some of what Beijing perceives as structural problems in China’s economic development. Chief among these is limiting the inflow of foreign direct investment into industries that do little to tackle some of Beijing’s major problem areas – real estate, mining and non-renewable mineral resources, and conventional manufacturing.

Real estate
Foreign investment in the real estate industry has been declared dead. From China Law Blog to Stan Abrams of China Hearsay, everyone is agreeing that the new restrictions will not only significantly limit FDI in the sector, but kill it. As Steve Dickinson writes, “the effect of these provisions, when combined with the prior regulations, is to effectively eliminate most areas of foreign investment in real estate.”

That sentiment however is not universal and many analysts and investors remain puzzled over the likely impact of the new catalogue.

“I do not see any impact on the physical market or on our funds investing in China,” Richard van den Berg, managing director of ING Real Estate Investment Management told the South China Morning Post. (more…)

By Andy Scott

Just how sustainable is the property market in Beijing? Rental and sales rates have gone through the roof in the past two years and only look to go higher as the Olympics nears. Land owners have already pushed the average rental rates 10 times more than normal. Don’t expect it to last. And come August 25, anyone looking to pick up cheap property will need only to throw a dart at a map of the city to find available real estate.

Like Athens, Atlanta and Barcelona, housing prices have risen in the seven-year run up to the Olympic Games. For other host cities, these trends quickly became unsustainable once the crowds, media and athletes went home. Athens in 2004 and Montreal in 1976 both accrued substantial debt once their Olympic torches went out, Beijing may as well.

The property market in China already exists inside a bubble. When the Games end, Beijing won’t see a slight post-Olympic economic downturn like many other host cities have had, it will see a complete melt down. (more…)

China is expected to levy a property tax in 10 regions on a trial basis next year; the China Securities Journal reported yesterday quoting what it said was a well-informed source.

The State Administration of Taxation picked 10 provinces and cities, including Beijing, Shenzhen, Dalian, Jiangsu and Chongqing who may start paying taxes on property starting in 2008.

An official with the State Administration of Taxation said on Friday that it is preparing for the introduction of the tax; however, research is needed before enacting the new policy because large gaps exist between regional economies and the management of properties is complicated.

This is yet another means for the central government to rein in property speculation and stabilize the property market. China has imposed a variety of property taxes on developers, such as a land value-added tax, land-use tax and land-transfer fees. Developers pass on these costs when they sell properties.

The proposed property tax is expected to convert this tax levy into annualized tax, which will ideally slash housing prices which have jumped an average of 8.2 percent in August from a year earlier in 70 major cities in China.

Foreigners are now limited to buying one home for personal use in Shenzhen. The rule, which came into effect Wednesday, states that all non-mainlanders, including overseas nationals, Chinese citizens resident overseas and residents of Hong Kong, Macau and Taiwan, will be allowed to buy property only if they sign a guarantee that the house is their own property in Shenzhen and is for personal use.

According to the South China Morning Post, the rules will only affect new buyers. Non-mainland homeowners who already have more than one property in Shenzhen are grandfathered in and will be allowed to keep them.

According to experts the paper interviewed, the new regulations - the city government’s first real measures to limit foreign investment - are unlikely to have a serious impact on Shenzhen’s real estate sector. (more…)

Foreign investment in China’s property market reached RMB22.2 billion in the first five months of this year (up 89.9 percent from the same period last year) according to the latest figures from the National Bureau of Statistics.

As the Shanghai Daily reports:

Global property funds have remained very active tapping the increased demand for properties in Asia and other emerging markets.

Morgan Stanley, the biggest real estate investor among all Wall Street banks, announced last week that it has raised US$8 billion to create the world’s largest global property fund.

The New York-based company said it will invest almost half of the money in Japan, where the longest expansion since World War II is pushing up rents and fueling a building boom in Tokyo, and about 25 percent in countries including China and India, where apartment and office construction is booming as businesses grow. (more…)

The average rental rate for a three-bedroom in an expatriate community in Shanghai is US$4,000 per month according to a recent survey by ECA International. Shanghai rental rents rose five percent from the previous year, while the rental rate for a similar apartment in Beijing dropped six percent from 2005 to an average price of US$3,840, for a rank of 11th.

This from the Shanghai Daily:

Even though rental rates in Beijing and Shanghai are among the highest in the world, they are cheaper now compared to 10 years ago. The average rental of a three-bedroom apartment is about 50 percent cheaper in Beijing compared to 10 years ago while in Shanghai it is 40 percent less. (more…)