REAL ESTATE MARKET OF CHINA（DOC 12）.doc

REAL ESTATE MARKET OF CHINA Reasons for Growth Reform of China’s real estate sector did not take place until the late 1990s. Prior to that time, most of China’s urban population relied on the State for housing. Ownership of real property rested in the State, and property development was the responsibility of the State. However, starting in the early 1990s, China’s housing system began to transit to a market driven system. A brief timeline of housing reforms is as follows: Year Event 1988 Amended constitution to permit transfer of land use rights 1991 Employer/employee-funded housing provident funds commenced 1992 Public housing commenced to be sold off in major cities 1995 Regulations issued regarding sales and pre-sales of real estate, setting forth a framework for real estate sales 1998 Abolition of State-allocated housing 1999 Maximum mortgage terms extended to 30 years and maximum finance increased to 80% Formalized procedures for the sale of real property in secondary market 2000 Regulations issued to standardize quality of construction projects, setting forth a framework for the administration of construction quality 2001 Shanghai become first Chinese city to eliminate dual pricing for domestic and overseas home buyers, and Beijing to follow in 2003 Regulations issued to strengthen the administration of demolition and relocation in urban areas 2003 Strengthened administration of real estate loans (to reduce risk of banks regarding real estate bank loans and prevent continue overheating of investment in real estates) Notice issued by the State Council for sustained and healthy development of real estate market 2004 Regulations revised to prevent transfer of apartment units before land use rights certificates for such units are issued (to slow down property speculations) For details of the regulations published between 2001 and 2004, please refer to “Regulatory Overview – [(]” in Appendix [IX] to this Circular. The housing reforms promoted p