Hang Lung Properties Ltd. Chairman Ronnie Chan says concerns over a possible collapse of China’s real estate market are “total crap.” There is no real estate bubble in China, Chan said, because of the “humongous demand” from Chinese consumers and the steps the government has taken to fortify the market. For Chan, people use the word bubble “too loosely”.
In 2010, Shanhai home prices rose 26 percent, and in Chonqing, they rose 29 percent, which prompted the government to increase the minimum amount for down-payments for second homes. Beijing also instructed local officials to establish price targets for any new properties.
Chan says that many of the houses in China are “substandard”, and Chinese consumers want better quality homes. As a result, they have plans to tear down those buildings and develop high-quality homes that will meet consumer demands.
Leading up to the housing crisis in the United States, one could argue the mortgage lenders were given free reign to do as they pleased, whereas the Chinese government in Beijing has implemented policies it hopes will prevent a collapse. In January, Premier Wen Jiabao said Beijing will implement controls that will regulate speculative buying. Beijing has already suspended mortgages for those buyers seeking third homes and restricted loans to developers.
Hang Lung Properties Limited has an extensive real estate portfolio in Hong Kong and owns and manages several commercial properties on Mainland China. Ronnie C. Chan has been Chairman since 1991 and has encouraged the company’s expansion into the Mainland.