The Chinese real estate industry is set to receive a much-neededboost which may include an easing of restrictions on the purchaseof second homes, the expansion of funding channels for developersand a further cut in the taxes and fees associated with propertypurchase in China.The plan is part of the government’s efforts to keep thecountry’s economic slowdown at bay. It is busy on a packageof plans to revive ten key industries to keep China’s GDPgrowth above 8% and has already approved similar plans for thesteel, textile and car industries. The property industry is one ofthe biggest drivers of China’s domestic economy. It contributes aquarter of fixed-asset investment and employs around 77 millionpeople, so it is a prime candidate for a lifeline from thegovernment.Although the plan is still waiting for approval fromChina’s Cabinet, the State Council, industry experts say thatthe government is keen to keep the property sector buoyant and isconcerned that it has recently suffered from sluggish sales.According to the president of China Real Estate Chamber ofCommerce, Nie Meisheng, the draft plan will be discussed at theannual National People’s Congress on 5th March. He said theplan will include suggestions for affordable housing, more policysupport on loans for real estate firms and more innovativefinancial 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 of2009. Nie added, “Whether the government passes the plan ornot, the property market has its own operational discipline. Whatthe outside forces can do is to speed up or slow down thecorrection process.”Industry experts welcomed the loosening-up of governmentpolicies, but warned that there are still issues that need to beaddressed to ensure stimulation of and sustained growth in themarket.Although the Chinese Central Bank is proposing theestablishment of real estate investment trusts (REITS) to ease thecash flow problems for developers, there are still other barriersto investment which need to be addressed. These include the doubletaxation imposed on both property assets and the dividend paymentof REITs as well as the government’s restrictive policy onforeign investment in the real estate sector.James Gonzalez, Market Analyst at Obelisk InvestmentProperty, says that there is general agreement within theindustry that this package of measures can only have a positiveeffect on the Chinese real estate sector, “however, there isa long way to go and if the restrictions on foreign investment arelifted, then China will certainly be a market to watch.”For more information on overseas property investment and to findout about Obelisk’s latest projects, contact Obelisk free on 0808160 0670 (UK) or 1800 932 514 (IRE).Obelisk also produces its Absolute Guide Series which containsthe most recent investment information on 30 of the world’stop emerging markets. They can be downloaded free of charge from athttp://www.absoluteguideseries.comEmail:info@obeliskinternational.com or visit our website: http://www.obeliskinvestmentproperty.comForpress enquires, please contact Obelisk’s marketing departmenton ( 34) 952 820 319 or email press@obeliskinternational.com
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