Product classification
 
 
Contact
 
Changzhou Office: No.9, XiShan Road, Changzhou City, China
Phone/Fax: +86 519 85102276
Cell: +86 13571900119
E-mail: trade@85xianji.com
 
News Center  
Foreigners difficult to buy house in China
Date:2010/8/2      View:926
 
Buying a house in the city you adopt is a major commitment. In China, that decision may embroil you in situations you never imagined. Shi Yingying examines the pros and cons.

While local residents complain about escalating property prices from Guangzhou to Beijing, the comparative value for money still tempts foreign investors, especially those who have lived and worked in Chinese cities for a long time. With China's growing importance as a major international financial power coupled with the property boom post-Olympics and post-World Expo, more and more foreign buyers are considering riding on the dragon's tail. What holds them back, however, is the bizarre paperwork, the obscurity of the Chinese real estate market and ever-changing regulations and controls.

"Those not really committed simply avoid the mess and just rent," said American David Sutton, who has gone through the process of buying and selling properties in Shanghai and Sanya in Hainan. "Foreigners who buy here are more committed to China and they believe it is worth taking the risk."

But for those who are unfamiliar with the minefields in real estate, they may end up getting into trouble, like Christopher Palmer did.

Palmer had already put a down payment on his Baoshan property in 2008 and completed all the necessary paperwork. But, the bank refused to complete the transaction for the mortgage because it said Palmer did not have the proper visa. He was on an L or tourist visa.

"They sprung this on me after I had signed the contracts," said the 35-year-old American who works as an English teacher in Shanghai.

"I understand they want to make sure I will stick around but they had seen all the visas and they knew I had been here for several years, and would not be leaving anytime soon."

While Palmer's frustration is understandable, his story emphasizes the importance of doing enough homework before commitment. The expatriate wanting to put down roots must meet one fundamental principle.

"They must have lived in the city on a residence permit (known as the Z visa) for more than one year ahead of the date of purchase, according to the Opinions on Regulating the Access to and Administration of Foreign Investment in the Real Estate Market (Decree No 171) issued in 2006," says Liu Si from the Real Estate Trading Center in Luwan district.

Related legal documents must also be submitted. These include the work contract, work permit or the proof of one's status as student. All these also need to be notarized, if they are not already in Chinese.

"Imagine a foreigner coming into your country with the intention of buying an apartment with only a tourist visa. Do you think it should be allowed?" Liu says. "This is China, and if you want to buy a property here, you have to follow the proper procedures."

There may be other restrictions, depending on the city. In Shanghai and Beijing, foreigners are only allowed one residential property each.

"The property is to be used for living in and buyers here are required to sign a letter of commitment, stating they wouldn't buy more, with the signatures of their official Chinese names (this can be arranged at the notary office if expatriates don't have one) on the paper," says Liu.

At least property buyers in Shanghai and Beijing can refer to the set of guidelines. Expatriates in Sanya are less lucky.

"The lack of standard, consistent information is a major problem, especially in Sanya. It seems to be very arbitrary," says David Sutton who bought a 209-square-meter ocean-view apartment and had an unpleasant encounter with the local real estate agency.

"Sanya is an outlaw frontier," says Sutton. " I found that the real estate agents' main concern was how to make the most money. They do not serve as advocates for their clients, neither buyer or seller and they are looking out only for themselves. Don't even think of getting into this process without some help of a Chinese friend whom you trust."

Once a buyer is past the initial hurdles and all the papers are delivered, it usually takes another 45 to 90 days to get the process completed. In Beijing, property agents say it normally takes 30 days to get the process completed. If buyers pay off the whole sum at once, the process may take just seven days.

"It is so much easier than in Western countries. I am a European and it took me less than a week to do all the paperwork once I decided to buy my place," says 33-year-old Spanish Mark Larsen who bought a one-bedroom apartment in Xin Zhuang.

"Limit your choice of locations and find a trusty agent," says Yan Ai, who started looking at apartments around Jing'an district last August with her German husband.

Some of the more popular areas that attract foreigners in Shanghai are centralized around Xin Tiandi, Lu Jiazui, Gu Bei and Lian Yang, according to Howard Zhang from Crispins Property Investment.

For Beijing property buyers, high-end apartments in Chaoyang district or luxury villas in Shunyi are preferred by expatriates, says Wang Xiangjing, general manager of Century Realty.

There are a number of real estate companies who specialize in helping expatriates but they may charge more.

The average commission for completing a sale is around one percent of the property price in Shanghai, but Beijing property agents normally charge three percent, which is the upper limit regulated by law. For those who can speak Chinese, a smaller or local real estate agency chain is more affordable. If in doubt, ask a Chinese friend for advice.

After making an offer, the owner and buyer will sign a stamped sales contract. Armed with this piece of paper, foreign buyers can then start shopping around for the best mortgage deals. Loans are available to foreigners from large Chinese banks such as Bank of China, China Construction Bank and international banks such as HSBC and Standard Chartered.

"Expatriates actually enjoy certain advantages in terms of applying for the loans as certain international banks will not consider lending money to Chinese," said Howard Zhang from Crispins.

Once the loan is finalized, all the necessary documents are checked once more by both the agent and the bank. If everything is in order, buyer and seller can then proceed to the district property trading center to transfer the name on the title deed.

And once the name is on the deed, the happy expatriate will have successfully cleared all the hurdles and would now join the ranks of proud owners hanging on to the fastest appreciating pieces of real estate in the world.
 
© 2010 CANADA TECHNOLOGIES LIMITED All Rights Reserved.
Changzhou Office: A403, Building 3, No.18 HuaShan Road, New North District, ChangZhou City, JiangSu Province, China
Phone/Fax: +86 519 85102276 Cell: +86 13571900119
E-mail: trade@85xianji.com
Links: Hopeland  AAC Machine
กกกกกก Probiotic Processing Equipment


Web Stats: