Priority for property

By Wei Xi Source:Global Times Published: 2018/7/18 18:33:39

When foreigners want to purchase real estate in China, they must consider many factors such as regulations and rising prices



Even though regulations were eased regarding foreigners purchasing real estate in China, enthusiasm never spread. Photo: VCG



Purchasing real estate is never a small deal, especially in big cities where prices are inflated and everything is expensive. While it troubles many young Chinese who struggle with whether to rent or to buy, it is also not an easy issue for foreigners who plan to stay in China long-term.

Fredrik Vold, 29, is from Norway, and during a casual tourist trip to China in 2016, he ended up meeting his now-wife who is a native Chinese.

Last year, the newly-wed couple bought their first apartment in the capital city. Though they finally settled down in their love nest, the process of looking for and then buying an apartment was something they would never want to go through again.

"It's very complicated and difficult, and there are additional requirements for foreigners; the whole process took many months actually. When I compare the process with other countries, it's seems much more difficult," Vold told Metropolitan. 

Vold further explained that such troublesome issues included transferring money from abroad because there is only a limited amount of money you can transfer at one time and oftentimes, a lot of money will be lost due to transfer rates. In addition, it is much more difficult for a foreigner to get a loan from the bank in China than a native Chinese. 

According to a 2015 report from km.house.qq.com, the real estate section on Tencent's news portal, looser regulations regarding foreigners purchasing real estate in China had been released. In 2015, the Notification of Adjustments on the Polices Regarding Foreign Capital's Admission and Management in Real Estate Market was issued, and the requirement that a foreigner had to study or work in China for at least one year before being able to purchase real estate had been removed.

Understanding regulations

Ever since 2006, there have been strict regulations on foreigners investing in the Chinese real estate market. Restrictions included the minimum number of years a foreigner was required to study or work in China before gaining the right to purchase, the number of properties a foreigner can buy and that foreigners were not allowed to get medium and long-term loans from banks.  

In early 2018, as one of the cities with the strictest demands on real estate purchasing, the Beijing municipal government once again began to guarantee foreigners' rights to purchasing real estate. However, the enthusiasm never occurred among expats.

A Chinese real estate agent in Beijing, who wishes to be anonymous, told Metropolitan that compared with previous years, the number of foreigners who inquire about purchasing real estate has dwindled, which he attributed to the extreme high prices.

Vold agrees.

"The housing prices in Beijing are much higher, almost double the price of those in similar locations in Norway," Vold said. "So, it's a problem many foreigners are facing, too. Especially since there are culture differences, such as many foreigners are expected to pay for a house themselves, but Chinese get a lot support from their family to buy their first home."

Vold also reminded foreigners who are considering purchasing real estate in China that, like applying for a driving license, a notarized Chinese name is needed if one wants to put his or her name on the title of the house.

Different concept of home

What makes something a "home?" Different people have different takes on this subject, but for most Chinese, owning a place is definitely the most important factor.

"Most foreigners think renting is the most convenient option, but then there will be problems when they want to marry in China because the Chinese have a different understanding of that," Vold said. 

The family support he mentioned is based on traditional Chinese norms and therefore, the Chinese elder generation will spare no effort to help their children get a home. For centuries, the concept of being settled down has been valued more than drifting around. Even the Chinese character "an," which means "safety," consists of a symbol of a house.   

Molia, from the US, disagrees. She said she would never consider purchasing real estate no matter where she lived.

Having lived in Asia for five years and two months in China, she thinks renting is the best way for her.

Kevin Richardson from South Africa has lived in Beijing for about two years, and he is now considering purchasing real estate, even though he is very aware of the high prices here.

"I can get a property that is 2,000 square meters with a 1,000-square-meter, six-bedroom house for 2 million yuan ($299,000) [in South Africa]. [But] here, a 135-square-meter apartment in CBD [sells] for 15 million yuan," he told Metropolitan.

Richardson is set to marry his Chinese fiancee soon, but he said the real estate purchasing plan has nothing to do with the marriage, but more to do with his plan to better develop his business in the country. 

"I love Beijing and would honestly like to settle here, even if I don't marry a Chinese woman who has a house," he said, adding that if he decides to leave one day, he believes he will get back what he paid "and maybe more back from it if I sell."



Foreigners have interest in purchasing real estate in China. Photo: VCG

Make an investment


Andy Friis, who is also from Norway, purchased his first piece of real estate in Zhuhai, South China's Guangdong Province, six years ago. It is a special location - being near both Hong Kong and Macao. He also believed that he purchased his property in an up-and-coming area, which would make his purchase a solid investment in the future.

Now the price of the real estate has doubled.

Friis said that even when he was a child, he had special interest in real estate. "I use to take my mom to look at different houses; it was kind of like a hobby. Every week, I would look at the paper [for the housing ads]. I really enjoy doing that," he told Metropolitan, adding that he had even thought about being a real estate agent back then.

Friis has always had an appreciation of the Chinese real estate market since he first arrived.

"Way back in 2008, when China had the Olympics, I actually asked my dad if I could borrow some money to buy a house in Beijing because I thought China is where I wanted to be for a while, and I thought China was developing fast. So, if you didn't buy a house then, you would lose out a little bit. If you are renting houses, you help other people make money," he said.

However, due to some issues, he did not achieve his goal of buying property in Beijing. The inability to fully understand the local laws is what he sees as the biggest difficulty for a foreigner, especially since he can't read Chinese.

The 70-year property right one can have on their real state based on Chinese law is also a concern for many foreigners when purchasing property in China. However, Friis has a different way to look at it. "You don't need to think about it as a 70-year investment, maybe just a five to 10-year investment, and you still get to sell them and make money."

Posted in: METRO BEIJING

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