Boost for Chinese Real Estate Industry
The Chinese real estate industry is set to receive a much-needed boost which may include an easing of restrictions on the purchase of second homes, the expansion of funding channels for developers and a further cut in the taxes and fees associated with property purchase in China.
The plan is part of the government’s efforts to keep the country’s economic slowdown at bay. It is busy on a package of plans to revive ten key industries to keep China’s GDP growth above 8% and has already approved similar plans for the steel, textile and car industries. The property industry is one of the biggest drivers of China's domestic economy. It contributes a quarter of fixed-asset investment and employs around 77 million people, so it is a prime candidate for a lifeline from the government.
Although the plan is still waiting for approval from China’s Cabinet, the State Council, industry experts say that the government is keen to keep the property sector buoyant and is concerned that it has recently suffered from sluggish sales. According to the president of China Real Estate Chamber of Commerce, Nie Meisheng, the draft plan will be discussed at the annual National People’s Congress on 5th March. He said the plan will include suggestions for affordable housing, more policy support on loans for real estate firms and more innovative financial products to meet property developers' financing demands. If the plan is passed, it is hoped that the Chinese property market will improve in the second half of 2009. Nie added, “Whether the government passes the plan or not, the property market has its own operational discipline. What the outside forces can do is to speed up or slow down the correction process.”
Industry experts welcomed the loosening-up of government policies, but warned that there are still issues that need to be addressed to ensure stimulation of and sustained growth in the market. Although the Chinese Central Bank is proposing the establishment of real estate investment trusts (REITS) to ease the cash flow problems for developers, there are still other barriers to investment which need to be addressed. These include the double taxation imposed on both property assets and the dividend payment of REITs as well as the government’s restrictive policy on foreign investment in the real estate sector.
James Gonzalez, Market Analyst at Obelisk Investment Property, says that there is general agreement within the industry that this package of measures can only have a positive effect on the Chinese real estate sector, “however, there is a long way to go and if the restrictions on foreign investment are lifted, then China will certainly be a market to watch.”
For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).
Obelisk also produces its Absolute Guide Series which contains the most recent investment information on 30 of the world’s top emerging markets. They can be downloaded free of charge at http://www.absoluteguideseries.com/
Email: info@obeliskinternational.com or visit our website: http://www.obeliskinvestmentproperty.com/
For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com
The plan is part of the government’s efforts to keep the country’s economic slowdown at bay. It is busy on a package of plans to revive ten key industries to keep China’s GDP growth above 8% and has already approved similar plans for the steel, textile and car industries. The property industry is one of the biggest drivers of China's domestic economy. It contributes a quarter of fixed-asset investment and employs around 77 million people, so it is a prime candidate for a lifeline from the government.
Although the plan is still waiting for approval from China’s Cabinet, the State Council, industry experts say that the government is keen to keep the property sector buoyant and is concerned that it has recently suffered from sluggish sales. According to the president of China Real Estate Chamber of Commerce, Nie Meisheng, the draft plan will be discussed at the annual National People’s Congress on 5th March. He said the plan will include suggestions for affordable housing, more policy support on loans for real estate firms and more innovative financial products to meet property developers' financing demands. If the plan is passed, it is hoped that the Chinese property market will improve in the second half of 2009. Nie added, “Whether the government passes the plan or not, the property market has its own operational discipline. What the outside forces can do is to speed up or slow down the correction process.”
Industry experts welcomed the loosening-up of government policies, but warned that there are still issues that need to be addressed to ensure stimulation of and sustained growth in the market. Although the Chinese Central Bank is proposing the establishment of real estate investment trusts (REITS) to ease the cash flow problems for developers, there are still other barriers to investment which need to be addressed. These include the double taxation imposed on both property assets and the dividend payment of REITs as well as the government’s restrictive policy on foreign investment in the real estate sector.
James Gonzalez, Market Analyst at Obelisk Investment Property, says that there is general agreement within the industry that this package of measures can only have a positive effect on the Chinese real estate sector, “however, there is a long way to go and if the restrictions on foreign investment are lifted, then China will certainly be a market to watch.”
For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).
Obelisk also produces its Absolute Guide Series which contains the most recent investment information on 30 of the world’s top emerging markets. They can be downloaded free of charge at http://www.absoluteguideseries.com/
Email: info@obeliskinternational.com or visit our website: http://www.obeliskinvestmentproperty.com/
For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com
Labels: China, economy, investment, property, real estate, tax
posted by Alison Kane at 3:46 pm
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