China REAL ESTATE MORTGAGE LOANS BANKS
According to the Bureau of Statistics of China, the index of the real estate market of the country, which includes price and investment trends in this sector of the economy, in November 2008 dropped to a mark of 98.46. This index combines trends in investment, prices, supply and demand in the real estate market of China in one indicator. His peak performance - a mark 106.59 - index reached in November 2007 and since then has steadily fallen.

Total area of residential premises, which were sold from January to December 2008. Decreased by 18,8% compared to the same period a year earlier. The total value of transactions decreased by 20.6%.

Real estate market in major Chinese cities has collapsed on all counts. Thus, according to the Chinese real-estate agents, lower prices in Shanghai in the third quarter of 2008 amounted to 19,5%. In Shenzhen and Guangzhou, which account for 30% of Chinese exports, the volume of construction of residential and commercial real estate fell in the second half of last year to 20,6%.

Decline in construction in Russia in November 2008 with the exception of seasonal factors accelerated to 1.2%, with new housing, as compared to November 2007 remained at last year’s levels, by monitoring the socio-economic development of Russia in January - November, Ministry of Economic Development published on the site. As stated in the record department, the overall situation in the building is characterized by deteriorating terms of attracting credit resources and the freezing of many promising construction projects.

“Buy an apartment - be a patriot”

Chinese authorities have launched a strong advocacy company “buy an apartment - be a patriot.” Thus, the head of the Bureau of Urban Planning of the city Hefei Wang Aihua made on local television called “buy an apartment - be a patriot.” By “patriotic consumption” to support the national economy in crisis and urged fellow chairman of the Beijing People’s Political Consultative Conference Li Zhe.

Meanwhile, statements by Chinese officials have already caused a wave of criticism of the country and were perceived as bullying and the authorities’ desire to support real estate speculators.

In addition, adopted a package of anti-crisis measures to stimulate the property market, providing tax cuts for the acquisition of certain categories of housing, reducing the stamp duty on real estate and banks set the initial deposit on a mortgage from 30% to 20%.

Further falls

ChinaPRO experts predict drop in house prices in major Chinese cities in 2009 to 10% in 2010 - 2011. 5-7%. In smaller cities the decline was 5% in 2009, 8% - in 2010 and 4% - in 2011

A major correction in the near future and be subject to Russia’s real estate market, in one voice say analysts.

First, the financial problems of the largest developers. Banks refuse to extend new loans, increased the rates on loans already granted. Apartment sales while reducing and do not allow us not only to extinguish the credits, but often, and maintain current interest payments. Builders forced to resort to lower prices to spur demand. Secondly, because of the liquidity crisis, banks have significantly reduced their mortgage programs, because of what has been dramatically reduced effective demand.

Russia’s and China’s development companies are in a very difficult situation. They quickly grew in the last few years, and counting on the possibility of re-credit at any time. Now, to maintain the liquidity they have to sell shares in the unfinished objects with a large discount. Therefore, in the next year the cost of real estate may drop by 30-40%.

The issue price

Meanwhile, real estate in China is now an average of 40-60% cheaper than in Russia. The price factor, as well as the simple procedure of registration of ownership of real estate in China may encourage Russians to buy residential and commercial properties in China, analysts say.

As described ChinaPRO Irina Rogachev, director of travel company OOO “Flame & Co” (Vladivostok), which is selling real estate in China, Russia prices for apartments and offices in 2,5-3 times higher than Chinese. According Rogacheva cost per square meter at Sanya (Hainan Island) now ranges from $ 500 to $ 2000, a small border with Russia, Chinese cities can buy a two-room apartment for $ 15, 000. The average price of square meter of housing in areas of Beijing within the Fifth Ring Road of about $ 2500, in Guangzhou - 9 000 yuan ($ 1323).

For comparison: the cost per square meter non-elite housing in Moscow is currently around $ 4700 - $ 6000, in the regions - $ 1500 - $ 3000. In this example, the average income in Guangzhou in 2008 was comparable with earnings inhabitant of Russia millionaire cities (do not take into account Moscow) and reached 45 000 yuan (U.S. $ 6 620).

According Rogacheva interest of Russians to the Chinese real estate in addition to the price factor fueling the simple procedure of registration of property rights. To obtain a passport for an apartment and land certificates are required: a copy of passport, certificate of employment in Russia; certificate of residence in Russia, a copy of marriage certificate. All documents are translated into Chinese language and certified by a notary. In this design of the secondary housing, for example, takes only five days.

However, as described Rogachev, in the last couple of months the demand of Russians for the Chinese real estate has fallen. “U.S. eyes more expensive, and hence increases the cost of Chinese apartments,” - she explained.