China Real Estate

The particularly strong real estate boom in China give some desires. But the legislative corpus and the precariousness of the land-registry make a lot the operation less attractive than the numbers suppose it.

They climb quickly, the rents of the Chinese lodgings. Very reasonable has two years again, they knew since a two-digit growth and the real estate speculation made of the acquirement of an apartment an expensive investment.

The economic dynamism provoked fundamental restructurings in the urban landscapes, in order to adapt the lodgings to the increasing incomes. The first 700 Chinese cities build the skyscraper with strength in order to answer the demand, to the risk sometimes to anticipate it.

The prices increase quickly and the choice is big, between well-off villa in the ghettos reversed for new rich and luxurious apartments in big towers. The tariffs to the square meter remain besides very affordable for the meantime for a Western:  in Peking the m2 costs 600 euros for example, on average. An appetizing price when one reads the reports of growth of the sector. Even the "siheyuan", these traditional homes to square court that parsement the hutongs is on sale. Between 1 700 and 3 500 euros the square meter, these superb houses of an inestimable historic value are in way of disappearance and their price doesn't stop anymore flying off. Those that are put on sale sometimes can same being gigantic, until 6 000 m2 in full center of Peking. But there to live often implies to have to do works of discouraging size there to put to level the electric systems or the plumbing. "Without speaking of the problem of the heating, one lived the last winter with a maximum of 14 degrees in the house because there is not a correct insulation."tell Sophie who fears the arrival of the big cold weathers.

Especially, to buy in China means to become owner of the walls. But in the law of the country, soil, him, remain attached to the Communist state. To buy a pretty building to see it to be shaved less one year later with minimal amends is quite plausible. Lately, the Coffee of the Post office, a French restaurant that had opened in a small hutong should have closed its doors after only six weeks of activity. It saw a whole part of its space requisitioned to widen the street. The land-registry is absolutely unforeseeable, and the most often, the purchaser doesn't have access there simply. To foresee seems impossible.

"It is a risk, in fact but the agencies that we contacted assured us that there were few risks for the new buildings" tells Pascal who hesitates again to buy, after months of reflection.

Conscious of the problem, the government decided to adopt a set of reforms aiming to change the nature of the real estate transactions and to write down them in the long term. The Chinese real estate boom entailed a rise of the speculation and the government fights henceforth firmly against the bettors of the urbanism. End June, the people's parliament adopted several measures for example:  it increased to 30% the contribution of departure to invest to acquire a second building. He also limited to a per person lodging the possibilities of purchase for the strangers. He/it raised 2 to 5 years the period during which an important tax is inflicted to the resale. He finally raised the interest rates for the home loans and fixed a quantitative objective of 70% of lodgings lower to 100 m2 in the big cities. Some, like Peking, try to play the game and to slow down the race. But of others as Shanghai decided to get round the law limiting the strangers to the purchase only one property.

Nevertheless, these measures already had the effect of calming the speculators extensively. The objective of this action is also of recadrer the market of the real estate toward the modest wages. Indeed, the increase in prices of the lodgings penalized the least favored categories of the population that don't dare to get involved more in the acquirement of their lodging heavily. In the same way, the speculation orchestrated by the well-off investors or the strangers dragged an anticipatory alarming situation of the demand. Many lodgings upscale remain vacant in the new towers whereas the less comfortable families don't find any lodgings to an acceptable price.

Today, he takes out again of the perspectives of the Chinese real estate market an ambiguous report. If the prices are always to the rise, the shift that they dig with the reality of the needs entails a dangerous situation. The government tries to control as it can while securing to the maximum the bubble that inflates itself. But the situation is henceforth risky for the potential purchaser:  only the acquirements long-term are henceforth interesting but the guarantees that the property supposes in China are insufficient. To buy an apartment in China, it is necessary to want to take a long-term risk therefore. And without guarantee that the game is worth the candle well.