Beijing property expo sees fewer projects from city

Overseas and non-Beijing property projects dominate the Beijing Spring Property Expo, the first major exhibition following the unveiling of housing market curbs in March.

Of around 500 housing projects advertised at the expo, which opened on Thursday, more than 300 are overseas projects and 150 are non-Beijing projects, according to the event's organizer. Fewer than 50 projects are in Beijing.

Still, Beijing projects attracted most interest. Those projects were concentrated in Beijing's suburban counties, with only two in the city's main urban districts.

"I want to buy a new home for my son who is going to get married soon. But these projects are too far away," said a 61-year-old man who declined to give his name. The central government announced on March 1 a 20 percent capital gains tax on pre-owned home sales. Several Chinese cities announced detailed policies at the end of March. Beijing's policies include strict implementation of the 20 percent tax and a ban on single-person households purchasing a second home.

On April 7, Beijing announced further tightening measures, raising the down payment requirement for second-home purchases to 70 percent if buyers use their mandatory provident funds as a mortgage.

"These curbs will basically squeeze investment-oriented housing demand out of the market," said Qin Hong, a researcher with a think tank under the Ministry of Housing and Urban-Rural Development.

But the tax also resulted in a pre-owned home buying spree as people rushed to buy, fearing the tax will actually be borne by buyers. Pre-owned property turnover in March tripled compared with February, according to housing brokerage Centaline Beijing.

The curbs also changed the mentality of both real estate companies and buyers. Property companies were more confident about their new projects' sales due to the curbs on pre-owned home transactions.

At the expo, few property companies advertised discounts, which were commonplace at previous expos. Salesmen refrained from telling inquirers the actual price of their projects, and only revealed the price of projects two or three months ago.

Potential buyers also began to show more interest in new homes. An online survey by Soufun.com, China's largest property information website, showed that 88.5 percent of respondents said they will prefer new homes, and 68.4 percent said new-home prices will rise after the introduction of the new property policies.

More potential buyers are switching their attention to overseas property projects.

At the expo, new participants such as Lithuania, Latvia and Bulgaria stood side by side with traditional exhibitors from the United States, Canada and Australia.

A saleswoman from Remax California, a property broker specializing in projects in Southern California, said her company has received more inquiries this year.

"Instead of investing money in a single house in a good community, I recommended my clients buy three to four homes in a less well-off community as they can rent more," said the saleswoman.

"Actually the return rate of the latter option is higher than the first option.

"You can spend $400,000 to buy several houses in the US. How much could you buy in Beijing with the money?" she said.

In the European property investment market, Cypriot and Portuguese projects were the most popular at the expo.

The two countries' property investment projects have a much lower threshold compared to other European nations, and it is much easier to acquire a residency permit or permanent residency.

For example, Cyprus grants foreigners permanent residency if they purchase a property worth at least 300,000 euros ($392,442).

"This is a very favorable emigration policy for Chinese," said Wang Qian, general manager of Worldway Group's Beijing office, an investment immigration brokerage.

"The project does not require you to stay for a certain period during the waiting phase, and does not require you to run a local business, as most other European countries do," said Wang. "You could earn permanent residency for your family members with a single investment, and enjoy the country's low tax rate."