The global financial crisis has adversely affected all countries worldwide, including the fastest-growing economy - China. If the average GDP growth of China in the period from 2002 to 2006 exceeded 10%, and in 2007 reached 13%, while in 2008 it slowed to 9%. In the current year, according to IMF estimates, the growth of Chinese economy will not exceed 7,5%. Naturally, the recession affected the local real estate market.
Demand fell sharply, the pace of construction slowed down, prices went down. However, this situation in the country did not last very long. Market experts point out that in China for several consecutive months, as housing prices rise. Thus, according to the National Bureau of Statistics of China, real estate in 70 major cities across the country in August went up by more than 3% over the same period last year. And the greatest growth occurred in cities such as Beijing and Shanghai. According to the Center for the Management of real estate transactions in Beijing, for the period from January to June this year, prices in the capital of China grew by 26.5% compared with the first half of 2008. Today the price per square meter in Beijing, crept close to the mark of $ 2000. In Shanghai, the situation is similar to results of six months. There, on the eve of the World Expo 2010, the rise in prices and did reach 30% and the cost per square meter is already in excess of $ 2500.
However, in the first month of autumn the demand for property in China cooled down. According to Shanghai Daily, in September housing sales in 30 major cities in China declined by 3.8% compared with August. The negative dynamics was observed in 14 cities of 30. But while real estate prices in cities such as Beijing, continued their growth. Therefore, many experts believe that some cooling of demand will not affect the overall positive trend that began in the market since the beginning of the year.
That helps China to overcome the global financial instability? A key role in maintaining the property market in crisis played the Chinese government, which undertook a series of measures before the downturn began, and during it. In 2007, when prices rose on the Chinese real estate are booming, the government has required banks to tighten credit policy, and imposed new taxes. This prevented the formation of a bubble in the market. In turn, during the crisis, has received valuable support of the market. Thus, from the stimulus package in the $ 585 billion has been allocated a large portion of it to the residential sector and infrastructure projects. Also, the entire current year has been reduced tax on property purchased from 1,5% to 1% of the cost, provided that the total area of ??housing does not exceed 90 square meters. m
Tax cuts have touched and those who wished to sell the property. So, if the seller owned their property for more than two years of its implementation it should not pay tax on the business, which is 5,5%. In addition, modified mortgage terms. So, for those who purchase housing mortgage for the first time, was the reduced size of the initial payment - from 30% to 20% of property value. There were a few times and reduced interest rates. So, in June this year the weighted average interest rate on your mortgage is about 4.3% - nearly a full percentage point lower than in December 2008.
Concessions were made for the construction industry. Back in September last year, anticipating the effects of the crisis, were reduced minimum size of the required amount of capital from 35% to 20%. Also, due to the fact that developers have access to the funds of state banks and as a result of increased pace of construction, real estate sales in many Chinese cities have grown considerably. For example, in Beijing, the growth in the first half of 2009 exceeded 50% compared with the first half of 2008.
Important role in preventing the collapse of the housing market has played and passed legislation in respect of foreign buyers. During the wave of economic growth China's demand by foreigners has increased sharply. However, in order to avoid speculation, there are a number of restrictions on the purchase of real estate non-citizens. Back in 2007 a law was passed that the right to buy housing in China has any foreigner residing in the country longer than one year. In this case, he can buy only one property. In order to make a deal, the foreign purchaser must submit documents that would confirm his presence in the country for over a year. At the same time, he signed a statement saying that he would use the apartment only for personal purposes, that is going to live in it himself. Lease purchased in China, housing the foreign citizen has no right. But the right to obtain a mortgage loan at a local bank he has. To do so would be to provide relevant financial documents and to contact the bank. The maximum loan term is 20 years. The minimum size of down payment, as well as the interest rate for foreigners will vary depending on the conditions of banks.