Cross-posted from Investing in Chinese Stocks.
Beijing has been cracking down on the real estate sector, using any relevant law and any government power to restrict the industry. See Beijing Metes Out More Punishment for Real Estate Violations and Five Branches of Beijing Muni Govt Ramp Up Real Estate Controls.
Following the latest crackdown on commercial property, realtors have pulled advertising and banks have halted lending. These are ostensibly commercial or dual use properties, but sold to individual buyers.
Commercial housing” may face resale difficulties , buyers are afraid of “getting their hands smashed”
In Yan Yuejin view, this move on the Beijing business class project to implement a strict purchase practices. “Second – hand housing business to allow the sale of property to individuals, in fact, to prevent second – hand housing land east of all kinds of controversy set”, set the two conditions for the subscription, so that this property back to the residential properties.
“As a result of the conditions on purchases of existing commercial projects, the basic and ordinary residential, such properties existing home transactions is bound to face the risk of backing out.” Yan Yue Jin that the future business class project prices or decline.
It is based on this concern, many of the completion of business projects signed by the project buyers eager to “go back”. A few days ago to pay the first payment, set in Beijing Daxing District, a set of “commercial housing,” Ms. Cui, these two days but busy consulting and check out the process, “the future business projects do nothing market, and now do not refund Room, afraid to hit in their own hands.
New projects can not be sold to individuals, how will it impact the commercial market?
According to Centaline real estate chief analyst Zhang Dawei statistics, 90% of the Beijing commercial properties are sold to individuals, and now the policy adjustment, “rules of the game” completely changed.
Zhang Dawei said that this policy will directly affect at least 600,000 units of commercial properties, is expected turnover will fall, prices will be lower. “Beijing is the first to regulate the commercial market, afterwards other cities are likely to open a wave of comprehensive closure of business projects, since residential purchase restriction led to investment in commercial property, could face a huge risk.
iFeng: 北京商住房限购追踪：中介紧急下架房源 银行停贷
Reuters: China stops individuals from buying Beijing commercial property
New commercial plots can now only be sold to enterprises, public entities and social organizations, said a statement issued by Beijing’s banking, industry and commerce, housing and urban planning authorities.
The statement posted on the Beijing Municipal Commission of Housing and Urban Rural Development website on Sunday said that personal loans for buying commercial property have also been suspended.
…Only second-hand commercial property can be sold to individuals, who have to prove income tax payments for five consecutive years and hold no property, the regulators said in their statement.
The smallest unit available should be a minimum of 500 square meters and real estate agencies that falsely advertise commercial plots as housing will be punished.
Vice President of Renmin University Wu Xiaoqiu says China’s regulatory regime allows home prices to rise, but not stock prices.
Wu Xiaoqiu: Many people think that these two types of assets is a seesaw, why? I do not know how long this regulation can last, a lot of regulation is over half a year, the next round facing a more explosive rise. We have done very well in many areas, can find some way, but in such as stable housing prices, so that it can and economic, income growth match the rational rise, so far have not found a way. Facts have proved that the purchase is not an effective way, this is not a time to take such measures, but many times, and should think about other ways.
As for the stock market can not rise also depends on policy guidance, and now the Chinese market, the stock market-related policies are still more stringent, we still do not welcome the stock market prices. In the stock market prices and real estate prices rose between, seems to be more tolerant of real estate prices, not tolerate the rise in stock prices. In fact, the rational study of the conclusion is just the opposite, the stock market price rise higher than the real estate prices on the future economic damage is relatively small.
The answer is China’s wealth is wrapped up in housing. It isn’t that China wants to let home prices rise, but not stocks. It would prefer neither rise and capital flow into other areas of the economy. But if there’s going to be a bubble, might as well be in GDP-driving real estate.
iFeng: 吴晓求：政策能容忍房价上涨 不太能容忍股价上涨
