China saw a 69% spurt in spending on new homes in Q1 2013 compared with the corresponding period in the previous year; Beijing’s rents have risen by 82% since 2008, says a China Central Television (CCTV) state television survey; in one city, Guangzhou, average sales prices soared 34.9% in the 12 months to March, and private landlord investement in new homes rocketed by 21% in 2012 alone.
So can the world’s largest residential market give any lessons to Europe? The country has 1.4bn people, mostly in large cities such as Chongquing (28m), Shanghai (23m° and Beijing (20m). With residential private ownership actively encouraged and 45% of home owner-occupied, according to official figures, a national housing policy – even one enforced by a Communist regime – is inevitably cumbersome and patchy.
All urban land is government-owned and all rural land is owned by local collectives, so a buyer or renter acquires the building but not the plot on which it sits. Land leases are 30 to 70 years and property value dimnished as the lease nears expiry.
In order to buy an older home it must be de-registered. Everyone who may claim a stake (typically any family member of the previous owner) has to agree to sell and be compensated. This process is costly and time-consuming – and sometimes simply impossible – but since 1990 a land registry has been established in most cities.
To read the rest of this segment, please check out the July issue of EuroProperty Trends in association with Estates Gazette.
Image credit : Photobank gallery