Beijing’s housing registration plans spark property dump

April 15, 2014 Leave a comment

Beijing’s housing registration plans spark property dump

Staff Reporter

2014-04-01

Chinese officials are said to be frantically selling off their mansions and holiday homes at low prices following the government’s declaration of plans to build a national housing information network, reports the Chinese-language Beijing Morning Post.

Beijing recently unveiled its 42-trillion-yuan (US$6.8 trillion) National New-type Urbanization Plan for 2014-2020, which includes plans to establish a unified property registration system by 2020. The State Council has already demanded the Ministry of Land and Resources adopt an ordinance by June.

A real estate agent in Beijing’s Haidian district told the Beijing Morning Post that since the announcement there has been an influx of officials looking to “dump” their properties at several million yuan below market value. Most of these officials have asked for a quick settlement and a once-off payment, the agent added.

Observers have naturally linked the increased sale activity to the national housing information network, which would require officials to publicly disclose their property ownership amid the country’s sweeping anti-corruption compaign.

Ren Jianming, a professor at the School of Public Administration at the Beijing University of Aeronautics and Astronautics, believes there is a clear connection between the national housing information network and the ongoing anti-corruption campaign.

“Some corrupt officials fear that once their property ownership is made public they will come to the attention of anti-graft authorities and be forced to explain the source of their immense wealth,” he said.

An agent told the paper that an exclusive luxury housing development in Guangzhou had sold for just 2,000 yuan (US$320) per square meter about 10 years ago to government officials with “special connections.” The value of the properties have since risen to more than 40,000 yuan (US$6,400) per square meter.

A staff member at a Beijing real estate agency said his company recently began offering free advice on property transfers to family members as a “hint” to government officials that they can avoid anti-graft probes or taxes by passing their properties to relatives.

 

Filed under Macro Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment