International briefs

From the April issue: Many observers view the Beijing housing market as overheated, and the Chinese government is taking new measures to try to keep things in check. In addition to raising interest rates three times since October, the Chinese government has ordered local municipalities to restrict the number of homes residents can own and to require higher down payments on home purchases. But these latest measures to cool the market likely won’t have the intended effect — they will produce pent-up demand rather than lowering prices, Jason Leow, the CEO of developer CapitaLand Ltd.’s China division, told the Wall Street Journal last month. Leow said longer-term measures that make owning multiple units more expensive — such as a real estate tax — would be more effective in preventing the market from overheating. “We prefer market mechanisms where they address the real issues,” he said. “By artificially curbing [home purchases], you’re just deferring the problem.” CapitaLand China sells about 3,000 residential units a year, and plans to put 4,000 units up for sale in the country this year. Leow said the government’s restrictions on the number of units people can buy will limit buyer activity in the short term, “but in the long term we still think demand is very strong.” [more]