Thursday, April 3, 2014

China market

2015 Sept 1 
In a dramatic change of heart, Beijing has reversed restrictions on foreigners buying residential apartments in China as it attempts to shore up its sluggish property market and reboot confidence in the economy.

Beijing has also partially relaxed rules on foreign capital requirements in wholly owned foreign enterprises investing in large-scale real estate projects. Foreign institutional investors no longer have to pay registration fees when taking out domestic and foreign 
loans to finance their property purchases, or when settling foreign exchange transactions.

Property is a significant pillar of the Chinese economy. Importantly, it is the collapse of the Chinese housing market that has partly been blamed for a growing outflow of capital into offshore markets

38% of Global GDP Growth in 2014 was from China

China Land Registry

Reuters photo

China issued rules requiring real-estate owners to register their holdings with authorities, a major step in the fight against official corruption that should make it harder for property speculators to evade regulations.
Until now, China has had no such registration requirement, an absence that has let some people use property as an opaque vehicle to hide assets from authorities.
The rules, issued on Monday and taking effect on March 1, are a key step in creating a nationwide property database. They were published by the State Council, China's cabinet-level political body. "All real estate assets - land, water areas as well as houses, forests and the like - will be subject to this set of rules," the announcement said. "The rules apply to the first-time registration, changes of ownership as well as property transfers, write-offs and asset freezing, among other things," it said.
Officials have said that China needs about three years to fully establish a unified registration system of real estate, and about four years to run a unified registration information management platform, which will support the country's fiscal and financial reforms

  • China's real estate Registration Rules

  • PUBLISHED MAY 13, 2014
    Latest China property step seen as a way to fight graft
    Academics confident that unified registration policy will deter and help uncover corrupt officials

    The new bureau will be in charge of registration of land, real estate, forest, grassland and maritime space. 

    OFFICIALS and academics have hailed the government's recently pledged unified real property registration policy, saying that it will help fight corruption. The central government established a government agency to supervise real property registration last Thursday as part of an effort to accelerate the registration process.
    The bureau, under the Ministry of Land and Resources, will be in charge of the registration of land, real estate, forest, grassland and maritime space. China plans to build a national real property registration system in about three years and make it operational for information sharing and queries in four years. A senior official with the new government agency said that the unified registration system does not target the housing sector specifically and its primary purpose is not to tackle corruption or curb home prices.
    But some academics said that unified registration will be a deterrent and will help uncover corrupt officials. Zhou Keda, a researcher with the Guangxi Academy of Social Sciences, said that the system would help make data on officials' home ownership more transparent and lead to discovery of evidence in potential corruption cases.
    Caixin is 'The Economist 'of China & Andy Xie is highly regarded so this article is worth reading -

    Developers’ caution in buying land could threaten local government finances

    Developers exercise extra caution as costs rise, dampening local government revenue hopes

    "Caution" is a word commonly used by mainland developers when talking about their land acquisition plans this year.
    That bodes ill for some local governments that are under pressure to refinance.
    Sentiment has soured quickly in the mainland's property market this year, pushing developers to play safe and make speeding up turnover a priority.
    "Volatility and polarisation have become industry themes now," Longfor Properties chairman and founder Wu Yajun said at an earnings news conference last month. "We will exercise extra caution when buying land in the future, as it is critical to buy the right land in the right city."
    Destocking and cost control have become the key words this year. This is the strategy not only for Longfor but also many other mainland developers.
    The whole industry is now suffering from lower profitability, as the cost of land and construction has soared much faster than property selling prices.
    Many provinces are reliant on land sales for a large portion of their revenues. While this revenue source has proven to be quite lucrative, it has also been highly volatile
    Even China Overseas Land & Investment, the country's biggest listed developer by market capitalisation, is turning cautious, although it was still aggressively snapping up land parcels until recently - spending 13 billion yuan (HK$16.2 billion) on four plots in February.
    "Land purchases must match property sales this year so that we can keep our finances healthy," company chairman Hao Jianmin said after announcing a conservative target of HK$140 billion for contracted sales, compared with last year's actual sales of HK$138.5 billion.
    "The competition for land in Guangzhou was much weaker than last year," Hao said. "I think [some developers] probably have not so much money left."
    Sean Li, Agile Property's head of operations, told the other side of the story.
    "To be frank, the land price in Guangzhou is a bit too expensive now," Li said.
    He said his company pulled out of a recent land auction in the city after bids surpassed the Guangdong-based developer's preset ceiling.
    The company has adopted a strategy of "shorter cycle, lower cost and quicker turnover".
    Mainland developers spent 100 billion yuan on land acquisitions in the first two months of this year, up 8.9 per cent from a year earlier, according to National Bureau of Statistics data.
    The growth rate was much slower than the increase of 33.9 per cent for the whole of last year to 992 billion yuan.
    With the housing market now cooling and sufficient land reserves on hand after aggressive replenishment last year, developers need to pause and rethink, CRIC, a real estate consultancy and a unit of E-House (China), said in a report last week.
    That will put to the test this year the resolve of cities in enforcing the property market cooling measures they have in place.
    Some analysts expect cities that are now suffering sluggishness in the housing market to switch to stimulus measures, as too much of their local economy hinges on a buoyant real estate industry.
    The most urgent priority is to repay debts. An analysis by global rating agency Moody's Investors Service of self-reported indebtedness of the nation's 31 provinces showed that 30 per cent or more of local government debts in Beijing and the provinces of Zhejiang, Jiangsu and Sichuan will come due this year.
    "Many provinces are reliant on land sales for a large portion of their revenues," Moody's said. "While this revenue source has proven to be quite lucrative, it has also been highly volatile."
    The National Audit Office said local government debts totalled 17.9 trillion yuan at the end of June last year, and 11 provinces depended on revenues from land sales for 37 per cent of the repayments.   -- 2014 Apr 1   SCMP

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