Real estates sales slacken

The Chinese government may consider easing strict controls to give the stagnant property market a much-needed boost, the 21st Century Business Herald has reported.

The China Real Estate Association (CREA) recently called on the government to shift its policies from ’strict’ to ‘moderate’ control on the property market.

The proposal appealed for local governments to be allowed to help the property market at their discretion, lowering taxes in real estate trading, encouraging housing needs for improving living conditions, and strengthening the industry’s early warning system.

Gu Yunchang, vice-chairman of China Real Estate & Housing Research Institution said policy changes were necessary.

“Those policies were made at a time when the property prices were skyrocketing,” Gu said. “Things are just the opposite on the market now.”

But Yi Xianrong, a researcher at the financial research center of the Chinese Academy of Social Sciences, said the current sluggishness stemmed from developers’ own bad judgment of the market situation; therefore they should take responsibility for the consequences.
Much more on this HERE.
Source: China Daily

Real estate China

A Ministry of Commerce circular states the power to approve foreign invested real estate projects has been delegated to the provincial level. The new approach is intended to raise the efficiency of the application process.

Since 2006, circulars have been issued by several government authorities, especially the Ministry of Commerce, that are directed at strengthening the supervision of foreign investment in real estate.

One aspect of this supervision has been the requirement that all new foreign invested real estate enterprises be reviewed and filed with the Ministry of Commerce at the national level.

This presented the national level office of the Ministry of Commerce with an increasingly unwieldy workload.

Now, even though a filing is still required with the national level Ministry of Commerce, substantive responsibility for reviewing and approving the application has been put into the hands of provincial-level authorities. This should speed up the process.
Source: Mondaq

Shanghai apartment

In Shanghai the real estate scene has changed since the beginning of 2008 — the number of property transactions has dramatically dropped, prices have soared and investors are turning to second and third tier cities for investment opportunities.

Shanghai´s residential property market appears dormant in some respects, with a plethora of buyers who have adopted a ´wait-and see´ attitude contributing to the decrease in performance since last year.

The decline of real estate transactions  in Shanghai has stunted individual mortgage lending.

The latest report from real estate advisers DTZ shows the number of major transactions (each valued at US$10 million or above) plunged dramatically from 17 in the first half of 2007 to eight in the first half of 2008.

According to the DTZ report, serviced apartment transactions in Shanghai accounted for two out of three such transactions in the whole of China.

In the first half of 2008 investment transaction value in the national serviced apartment sector rose from US$138 million to US$416.65 million — an increase of 201.9% year-on-year. At the same time the number of transactions decreased by 40% from the same period the previous year.
Much, much more HERE.
Source: Property Report Asia

Sichuan earthquake map

The Wenchuan earthquake in China’s Sichuan province in May was a major disaster:70,000 people killed, 18,000 missing, 375,000 injured, 5 million people homeless.

China is in the largest orogenic (which means ‘pertaining to deformation of a continental margin to the extent that a mountain range is formed‘ which is how the Himalayas got there) zone on the planet. But according to Hong Kong-based seismologist Dr. Michael Spranger Wenchuan had ‘never been considered high-risk compared to cities near other fault lines.’

After the Wenchuan earthquake, the earthquake risk in China is even higher because of tectonic shifting. The plates of the earth were moved by that earthquake.

The Straits Times in Singapore revealed two government-sponsored earthquake studies are in progress, both by NTU, both trying to find what action should be taken.

The business impact of planning to mitigate, respond to and recover from earthquakes will be significant all over Asia, even if no more earthquakes occur for many years.

Sichuan earthquake.

First of all, insurance companies are very concerned. The might face a tsunami of claims from a big earthquake in one of Asia’s megacities. Which means insurance rates are bound to go. Perhaps by a significant margin.

If building codes are revised to mandate greater resistance to horizontal ground motion (lead dissipators , for example, or lead & rubber bearings), commercial construction costs will increase even more than they have in the last year. Those costs will be passed on to the consumer.

The impact of another series of serious earthquake in Asia will be felt by businesses around the world. The impact of the recent earthquakes seem destined to mean higher property prices in the medium term.
Source: ZDNet Asia

Haoyuan Coal

An indication, perhaps, of the unpopularity of the real estate market is that Shanghai Wanye Enterprises, a China-based company engaged in property development and operation, has announced it will spend RMB225 million to raise its stake in Inner Mongolia-based  Etuokeqi Haoyuan Coal Charring to 45%.

The real estate operator, which held RMB700 million currency capital and RMB190 million operating cash inflow as of the end of June will pay RMB225 million in cash for the acquisition, of which RMB 90 million will be injected to boost Haoyuan Coal’s registered capital.

The acquisition will help Wanye Enterprises diversify its sources of revenue and reduce risks in property development amid the volatile market.

Haoyuan Coal owns three coal mines, which have proven reserve of 37.37 million tonnes.
Source: SteelGuru