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Property Market Remains Hot in Beijing
Last weekend was a rush for 29-year-old Liu Man, who works with a foreign public relations company in Beijing.

Despite the scorching sun, she spent the two days shuttling around various real estate projects with her fiance.

"I started receiving calls from sales representatives of various housing projects almost immediately after the World Health Organization (WHO) lifted its SARS advisory against Beijing late last month," she said.

Since her wedding is planned for next year's Spring Festival, Liu had been worried that the severe acute respiratory syndrome (SARS) would affect her arrangements, especially the time-consuming choice for satisfactory housing. "All housing fairs in May and June were cancelled," she said.

But another factor, forcing the young couple into a rush, is something none of those sales representatives would forget to remind them of.

"We are told (by the sales representatives) that a new policy of the People's Bank of China on housing loans may require people to pay 40 percent of the total housing cost, instead of the present 20 percent, as down payment," Liu said.

It seemed the promotion was quite successful because all of the seven real estate projects, which Liu and her fiance visited over the weekend, were busy.

Eventually, the young couple set their mind on a project bordering the east Third Ring Road, which costs over 7,000 yuan (US$845) per square meter.

A recent report from the Beijing Municipal Statistics Bureau expressed considerable optimism that the sales of housing in the Chinese capital would pick up soon after the end of the epidemic.

Zhen Xin, an official with the bureau and one author of the report, said housing sales were not bad even during the SARS outbreak.

"The total area of commercial housing sold this year has reached 4.2 million square metres by the end of May, 1.1 times that of the same period last year. The corresponding turnover is 18.3 billion yuan (US$2.2 billion), up 97.6 percent on a year-on-year basis," he said.

And the demand remains strong.

Over 60 percent of 1,000 local households, surveyed by the bureau for the report, have ranked improving housing as the top priority for local government over the next few years. Meanwhile, people from overseas and other parts of China maintained their interest in investing in Beijing's real estate.

Peter Achten, a consultant at a Beijing-based international business magazine who comes from Switzerland, is among those foreigners eager to have a house of his own in Beijing.

Having worked in Beijing for several years, he has become tired of living in a rented apartment.

Even without considering the rent, which can cost as much as US$3,000 a month, Achten said a rented apartment cannot give him the feeling of being at home in Beijing, where he plans to stay at least for another five years until the 2008 Olympic Games.

And now that the Chinese capital has lifted its ban and allowed foreigners to buy whatever housing they like in the city, he wants to choose a residence that can enable him to get into the real life of the Chinese.

My desire is to live with my Chinese artist friends in a village in Tongzhou District, he said.

Before last September, Beijing, as all the other major Chinese cities, stuck to a distinction between commercial housing sold to local people and that to outsiders.

Under the policy, foreigners and Chinese from Hong Kong, Taiwan and Macau can only choose housing from a small number of properties.

But for Fabienne Choi, who now runs two French restaurants in Beijing, buying housing in Beijing means a worthwhile investment in consideration of the city's promising economic future.

Born in Hong Kong but having grown up in France, Choi said the fast economic development of China in the past decade has deeply impressed her.

"The capital of the new world economic power, Beijing boasts the highest housing price of the country and is expected to maintain it in the future. If you have confidence in the future of China, you should invest in property in Beijing," she said.

She has bought two apartments in downtown Beijing in addition to the house where she now lives in the suburbs of the city.

Asked about the impact of the new policy of the People's Bank of China, which imposes stricter requirements on housing loan applicants, Choi said she was not worried.

"Actually, the central government's effort in improving the domestic real estate market will benefit foreign investors in the long run," she said.

Sun Xiwen, an expert with the Beijing-based Chinese Academy of Land and Resources Economics, echoed Choi's opinion.

"The policy, in addition to the effort of the Ministry of Land and Resources in curbing excessive development of high-grade housing, will force a healthy diversion of funds into the development of low-cost housing," he said.

(China Daily July 3, 2003)

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