On March 27, Beijing Business Today, a daily newspaper affiliated with the Beijing Daily Newspaper Group, reported on its front page that housing authorities in China’s capital tightened regulations on commercial real estate projects.
Late Sunday, the city’s housing, urban planning, industry and commerce, and banking authorities released an official statement that new commercial real estate projects — including those converted from office buildings to individual units — may be sold only to qualified enterprises, public institutions, and social organizations. In addition, the smallest unit for sale should not be less than 500 square meters.
Moreover, personal loans for the purchase of commercial real estate have also been suspended. The statement also said that second-hand commercial housing can only be sold to individuals who have paid their income taxes or social insurance for five consecutive years and have no houses under their names in Beijing.
Prior to this new round of strict tightening, commercial real estate converted for residential use has been a viable alternative given Beijing’s prohibitively high housing prices, despite the fact that the children of the residents are not qualified to attend school near where they live. In the past few years, 50 to 60 percent of commercially developed real estate has been sold to individuals for (residential) living.
Housing market analysts expect the new regulations will slow down the commercial real estate market significantly and reduce the number of units changing hands by over 30 percent.
According to 21st Century Business Herald, a Guangzhou-based national newspaper, the tightened restriction has the purpose of slowing down population growth in Beijing, as well as preventing a negative impact that the rising cost of office space will have on business activities.
Beijing Business Today, March 27, 2017
21st Century Business Herald, March 28, 2017