DOMESTIC investment in real estate projects in China in the first 10 months of the year was down by 54 per cent to 103.9 billion yuan (about HK$93.51 billion), according to a top government official. At a recent real estate conference in Beijing, Song Chunhua, director-general of the Bureau of Real Estate under the Ministry of Construction, said more than 80 per cent of the investment had gone to build much-needed residential projects. Mr Song credited this turnaround to a number of central government policies which were aimed at cooling down and had diverted a large share of investment to mass housing from luxury villas, golf courses and garden estates. The government had instituted a system of preferential land grants and tax incentives to encourage developers to build mass residential housing. It also strengthened control on land use for construction of luxury villas and golf courses. Recently, the Chinese Government moved to clamp down further on luxury projects by banning the construction of all golf courses, racetracks, luxury hotels, office buildings and villas until the end of next year. According to Mr Song, these various policies, aimed at regulating property development in China, have been instrumental in saving the country's newly-borne real estate industry. The total area developed during the first 10 months of the year decreased by 10.9 per cent, compared with the same period last year, he said. The total area of developments started in 1992 increased 78 per cent and the increase was 136 per cent in 1993. This year, the government has also been more successful in collecting taxes from real estate projects which in the past went into the pockets of tax evaders. In the first seven months of 1993, before the macro control policy was imposed, real estate investment hit a record 143.5 per cent increase over the corresponding period a year earlier. From 1992 to July 1993, 120,000 hectares of land, including land for all types of economic and technological zones, had been granted to developers, and many were awarded free of charge. The Chinese Government has recently moved to take back the land if developers fail to start construction within two years.