By Morgan Crank
March 2, 2010
Government policy resuming restrictions on local real estate purchases by foreigners is not expected to hurt premium property sales, many in the real estate market contend.
The government has chosen to reinstate its limitation on foreigners purchasing local real estate in China, after it had temporarily suspended the measure in the wake of the global financial crisis. Until last week, the government had suspended this in order to encourage foreign investment and strengthen the property market. Now, foreigners are able to buy only one apartment each in Beijing, and must prove one year’s worth of study or work on the Chinese mainland as a precondition for purchase.
Alongside 11 other policies released by the municipal government, this move is intended to make housing more affordable and curtain price manipulation and speculation, widely regarded as root causes of the financial crisis in the American real estate market. Beijing is looking inward to encourage domestic demand rather than investment-led demand coming from foreigners.
The effect may be limited, however, due to the relatively low number of foreigners actually purchasing high-end real estate, comprising no more than 5% of the market in Beijing. In fact, foreigners mostly prefer to buy high-quality houses, and usually pay for them in one payment due to difficulties in acquiring loans on the Chinese mainland. Some luxury housing projects may be affected, for example by lowering their prices, but any extensive impact on the Beijing property market may be small.
“The world has seen the impact that the real estate market can have on the global economy,” Edward Lehman, senior attorney at Lehman, Lee, and Xu, stated. “We specialize in Chinese real estate law and have the substantial knowledge necessary to assist our clients. Lehman, Lee, and Xu maintains up-to-date information on Chinese real estate law and can customize our services to fit the needs of our business clients. Since every area of China experiences variations in its real estate markets, we encourage our clients to visit any one of our offices throughout the nation so that we can specialize accordingly.”
Lehman, Lee & Xu is one of the first five private law firms established in the People’s Republic of China. After nearly twenty years of practice and development, Lehman, Lee & Xu now has more than two hundred patent, trademark and PRC-licensed attorneys working in numerous branch offices located in the most-developed cities in China. As one of the leading IP firms in China, Lehman, Lee & Xu provides high quality legal service to its clients and has been consistently rated among the top five IP law firms in China. Lehman, Lee & Xu is also a top-three commercial law firm, and has provided a variety of commercial legal services to hundreds of clients, many of them multinational corporations (MNCs) and Fortune 100 companies. The firm’s diverse catalog of commercial services covers foreign direct investment (FDI), merger and acquisition (M&A), tax, employment and many other areas.
For more information about Lehman, Lee & Xu, please visit the firm’s website at
www.lehmanlaw.com
.