Shanghai is considering barring non-residents from buying
property as investments in the hope of curbing price rises and
making homes more affordable to local low- and middle-income
families.
The Shanghai municipal government said in a recent directive
that several departments - including the housing, land and
resources bureau; the development and reform commission; and the
public security bureau - were drawing up a property-purchase system
for people who are not permanent residents of Shanghai.
The directive said the authorities will also create a separate
system for people with temporary residency permits, but no details
or timetable were released.
Temporary permits are issued to "badly needed" professionals
from outside Shanghai, allowing them to access insurance and other
benefits equivalent to those available to permanent residents.
The directive follows a State Council circular calling for
affordable housing for low-income urban families.
The directive says affordable housing should be made available
to both low- and medium-income families and calls for official
efforts to secure land for such developments.
Yin Bocheng, director of the Real Estate Study Center at Fudan
University, said a ban on property purchases by non-residents, if
adopted by the government, should help curb property
speculation.
"I think there are still bubbles in the property market," he
said.
"This is mainly because people from other regions have been
buying property as investments."
Statistics show that 367,100 property deals were signed in the
first 11 months of last year. Of those, 1.76 percent involved
overseas buyers and 16.7 percent involved people from other parts
of China.
"The proposed ban will help needy families, whether they are
lifelong residents or long-term temporary residents," Yin said.
However, he also said it was unlikely property prices would fall
until people started selling off their holdings.
Albert Lau, managing director of real estate firm Savills
Shanghai, said it was too early to predict whether a ban on certain
purchases would work.
"But I think it will hamper flows of both capital and immigrants
into Shanghai," he said.
"And what if other cities follow suit and start banning some
real estate sales?"
Si Weijiang, a Shanghai lawyer, said a ban would have no basis
in law and would do little to curb speculation.
"Determined investors could just borrow a residency permit from
a local and make a purchase," he said.
"They only need to sign a supplementary agreement to state the
ownership of the property.
(China Daily January 3, 2008)
