Deregulation: A Breath of Fresh Air for China’s Real Estate Sector

According to a Bloomberg report, car sales in China rose 48% last month. And there are other signs that, at least in some sectors, China’s economy is doing well.

One of them is real estate. During a panel discussion at the recent Wharton Global Alumni Forum in Beijing, several Chinese developers were upbeat about the prospects for China’s residential real estate industry during the next decade. Counter-intuitive though it may seem, the impact of the global financial crisis on China’s real estate market has been positive, some panelists said.

In the wake of the U.S.-led global economic downturn, officials in Beijing loosened restrictions on property buyers and developers, fueling the market and allowing it to resist the downturn, said panelist Zhou Xin, chairman and CEO of E-House (China) Holdings, a Shanghai-based, New York Stock Exchange-listed real estate brokerage company.

Several other factors have contributed to the strength of China’s residential real estate sector, the panelists noted. These include steadily increasing consumer demand driven by rising incomes, ongoing urbanization and intense cultural pressures supporting home ownership.

Read more about the Chinese real estate sector in the current issue of China Knowledge at Wharton.