China has become the latest country in Asia to ease property investment rules for overseas nationals, reported the China Daily. The new rules will allow qualified foreign institutional and individual investors to buy more properties on the mainland.
The Chinese Ministry of Commerce made the announcement last week, stating that foreign investors will also be exempt from registration fees when taking out local and foreign loans for property and settling foreign exchange transactions.
While restrictions on the number of properties purchased by foreign individuals and companies have been removed, there are still local housing purchase limits in effect that they are subject to. In Shanghai for instance, buyers without household registration are only allowed to buy one property, noted the newspaper.
Previous regulations only allowed foreign residents to buy one property in mainland China after they spent a year working in the country. The decision to relax the rules on foreign ownership was made by the government who believes the market is finally ready to handle an influx of foreign capital after housing prices stabilized.
“Before, when foreign capital came into China’s domestic property market, housing prices surged to a level that Chinese residents could not afford, and the pace of the housing price rises was so much faster than that of local residents’ income,” said Tao Wei, a property agent with Shanghai Tianyou Property.
The policy change will benefit foreigners who have worked in China and want to invest in the country’s property market. However, the increase in demand will be marginal compared with the huge real estate stock. It’s unlikely the new rules will significantly affect housing prices nationwide.
James Macdonald, research director at Savills East China, added that properties in Beijing and Shanghai are most sought-after by foreign investors. As purchase limits still exist in these key cities, speculation will not be an issue.
This article was first published on DDproperty.com, Thailand’s leading property site.
