Credit Tightening Shifts Investors' Decisions in Real Estate

Foreign investors must prepare to take a long-term view if they are interested in investing in the PRC real estate market, due to the central government's credit tightening, according to Ashley Howlett, partner at Jones Day.

“Several measures and regulations are actually targeting foreign business investors, because the portion of that is relatively small in the market, so it is an easy part to control,” Howlett said.

Foreign clients who used to look for quick returns from their real estate investments might now need to consider changing their plans, he said. Although rapid currency appreciation makes the market favourable, China's credit policy has raised barriers for investors to get funding within a short period of time.