Ordinary house buyers unhurt by revaluation
By Chen Hua (China Daily)
Updated: 2005-08-04 06:04

"What these foreign funds are interested in are luxurious houses, high-end office buildings and shopping complexes," Pan said.

However, China's foreign exchange reforms and the recently completed real estate macro-management makeover make it very hard for international property speculators to get quick short-term gains on investment, said Wang Lina, a finance professor at Chinese Academy of Social Sciences.

The 2 per cent rise will not add much value to houses, and any added value will be offset by increased tax. This higher stamp duty was introduced at the beginning of June, and was set at 5 per cent of the total selling income for houses owned for less than two years, the professor said.

Moreover, the market is currently not particularly active, especially in Shanghai and other eastern cities, after the government launched a slew of measures to cool down the runaway property market.

Most potential buyers are waiting to see any new market shifts, with very few choosing to buy houses at the moment.

It is hard for the short-term investors to find enough buyers to sell their houses at good prices, said Gu Yunchang, chairman of the Real Estate Association of China.

As a result of the sluggish market, it is less likely that the "hot money" imbedded in China's real estate market will withdraw from the domestic market at the moment, the chairman said.

The government's cooling measures would also exert pressure on future "hot money" seeking to enter into Chinese property market, professor Wang said.

The professor explained that China had just abandoned its peg to the US dollar and moved to a managed floating-rate regime based on market supply and demand with reference to a basket of currencies.

The new system will bring many uncertainties to the exchange rate, making it more complicated for foreign investors to make a big profit on China's real estate sector, Wang said.

On the other hand, foreign investors stand a good chance of earning a handsome profit in China's property market if they choose long-term investments such as providing financing for domestic property developers, said Wang Chen at DTZ.

This would help strengthen domestic developers and maintain the stability of the real estate market, the analyst said.

Close

Pet dogs tie the knot in Changchun 60-meter-long bridal gown Experimental satellite takes off from Jiuquan

Today's Top News     Top China News
Imports of crude oil expected to slow down         Roadside bomb kills 14 US marines in Iraq         Talks on charter flights welcomed         Six-party talks totter into no man's land         Pork low on menu as fears stay high         Ordinary house buyers unhurt by revaluation	Soft landing seen for China's economy       Hisense mulls over Kelon purchase       Currency revaluation will have little impact on agriculture       Rains set to pour across the country       Scientists leave to study E. African Rift Valley       Delegates continue to thrash out agreement