Property growth promised

A SENIOR Beijing government official has moved to bolster foreign confidence in the city's real estate market by promising to ensure steady growth and no dramatic fluctuations in prices.

Vice-mayor Zhang Baifa said the real estate market in Beijing was becoming promising with an expected increase in demand and proposed infrastructure development which would enhance the market's growth potential.

He also appealed to developers to use 'lower-end raw materials' in their projects in order to maintain cheaper sale prices.

He said some developers were using 'extremely expensive and high quality' materials to improve quality, and the resulting selling prices were boosted to an unnecessary high level by the increased development costs.

Mr Zhang spoke at the opening of the Second China Beijing Real Estate Fair, which is aimed at attracting foreign investment and boosting the city's real estate market.

The fair also provides an opportunity for trading and discussion on real estate investment policies. It is organised by the government-owned Beijing Real Estate Management Bureau and the semi-official organisation, China Real Estate Association Marketing Committee.


More than 120 real estate companies involved in some 200 property projects in Beijing and elsewhere in the country are taking part. Hong Kong property powerhouses such as Sun Hung Kai Properties, Henderson Land Development Co and Wharf (Holdings) are participating to introduce their property developments in Beijing.

Mr Zhang said that with successful economic controls imposed on the real estate market since July last year, the property market in Beijing was now growing steadily.

'I, on behalf of the Beijing government, ensure that the real estate market in the city will not face any dramatic price fluctuation,' Mr Zhang said. 'It is not expected that there will be any drastic rise or any sharp fall in property prices.' A robust real estate market was expected because of an estimated increase in demand, especially for office space.

According to Mr Zhang, thousands of investment companies and enterprises have set up or are about to establish offices in Beijing. This would stimulate demand in the office sector.


With more infrastructure being developed, he said the economy and real estate market would be improved.

Projects included development of another new international airport and the extensive construction of a natural gas pipeline system through the city.


With an attractive growth potential in the city's real estate market, Mr Zhang said the newly imposed real estate tax would not dampen foreign companies' investment interest.