Lessons from China
China has tightened FDI in the real estate sector, especially in the luxury category, to avoid international speculative money creating bubbles in the sector.
The Ministry of Commerce said it has taken a number of measures to ensure control over direct investment of foreign fund in the real estate sector which has seen soaring prices, making it difficult for ordinary citizens to own a house.
Local commerce departments should strictly limit foreign investment in luxury real estate, the Ministry said. Foreign investors need to establish a real estate company before they can invest in real estate projects, and they should also get approvals from the relevant departments to expand their business scope in order to invest in new projects.
Foreign investors are not allowed to bypass the above regulations by investing in domestic real estate companies via acquisition or changing the real controller of the domestic companies.
The Ministry asked local departments to report to it their approval of the establishment of foreign-funded real estate companies.
The Ministry would investigate into the cases and deal with irregularities.
China has been trying to provide proper housing for the public by building more economically affordable apartments and curbing the rapidly rising housing prices.
However, the prices of new houses rose by around six per cent in the first three months this year in 70 major cities including Beijing. — PTI
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