New policies curb foreign property buying

The central government issued new policies on Monday in the hopes of slowing down the property market.

Under the new regulations, foreigners are allowed to buy homes and apartments in China only after they have resided in the country for at least a year. They are also restricted from acquiring property that they would then lease out to others.

The residency requirements does not apply to overseas Chinese or those Chinese who live in Hong Kong, Taiwan and Macao, who wish to buy houses up to "a certain size" for their own use.

Xinhua published details of the new regulations, but did not specify when they would take effect.

The State Administration of Foreign Exchange reported in April that foreign property developers bought about 270 billion euros worth of property in mainland China last year, but many analysts think that the actual figure is bigger than reported.

A recent report published by DTZ Debenhan Tie Leung, a London-based property consultant, showed that overseas investors have already bought about 360 billion euros worth of property in the first quarter, nearly a third more than the whole of last year.

Beijing and Shanghai receive more than 80% of foreign property investments.

Concern about unchecked foreign investment has been expressed by several policymaking bodies, who say that it might have a negative effect on financial stability and property prices.