[photopress:propertybeijing.jpg,full,alignright]China’s top planning agency says that a campaign to slow down the property market is now working, but adds that the authorities cannot afford to drop their guard.
The National Development and Reform Commission says in a report that continued implementation of a raft of policies introduced in recent months was crucial to solve lingering problems in the real estate market.
These problems include a structural imbalance in housing supply, overly fast price increases in some cities and irregularities in property development and trading. To deter speculative investment in high-end property, China has raised mortgage rates and down payments, increased capital gains taxes on property, tightened land use rules, and ordered local authorities to build more affordable housing.
On the other hand it probably had no effect until after June 20 and it may not have had a great effect since then.
The early half of this year saw some amazing figures. Foreign investment in the Chinese real estate sector soared to 1.44 billion U.S. dollars in the first half year, according to a report by consulting firm CB Richard Ellis. The investment was 15 percent higher than for the whole of 2005 said the report carried by Shanghai Securities Daily.
The figure mainly refers to money used to purchase buildings and does not include purchases of land for real estate development. Statistics show that capital from North America and North Asia represents the lion’s share of the investments. Last year, capital from North America accounted for 43 percent of investments in China’s real estate properties. The figure rose to 51 percent in the first half year.
North Asian investment increased from last year’s one percent to 24 percent in the first half year while capital from Southeast Asia dropped from last year’s 36 percent to 19 percent.
Beijing and Shanghai remain the priority choices of foreign real estate investors. Beijing attracted 49 percent of the investment, followed by Shanghai which claimed 45 percent of the money.
Sources: CCTV.com and People’s Daily Online