SKYSCRAPERS: Buildings in downtown Shanghai. Unified realty registration may help curb soaring housing prices in China (CHEN FEI)
'This is a good policy. If it can be implemented this year, housing prices will drop immediately." This Weibo post on the evening of November 20 by Pan Shiyi, CEO of SOHO China, a leading Chinese real estate company, quickly went viral on the Internet and was also cited by media reports. Among the 16 million followers of Pan, many are from the media.
The policy mentioned by Pan is the "unified realty registration system." An executive meeting of the State Council chaired by Premier Li Keqiang on November 20 decided to integrate the responsibilities of realty registration into one department and establish a single information-sharing platform.
The effect of the policy seems to have been felt sooner than Pan had expected. Although the detailed measures are yet to be formulated, the pace of the price rise in the real estate sector has begun to slow down. According to a weekly market review released by Everbright Securities Co. Ltd. on November 24, the unified realty registration system has affected market sentiment, and the growth of new home prices has moderated slightly.
However, Zhu Zhongyi, Vice President of the China Real Estate Industry Association, thinks the unified realty registration system will not really lead to a drop in housing prices. In his opinion, the new policy can set up a single information-sharing platform, but cannot curb speculation and price hikes. The goal of integrating the nationwide realty information is to offer a reference for the government to get data and formulate policies. It will serve as a tool to monitor market changes, so it will be more effective in anti-corruption than in curbing prices. Whether it is to curb housing prices or fight against corruption, these arguments indicate that the unified realty registration system has had some effect.
In China, the term "realty" refers to both natural resources such as land, buildings, trees and forests. Currently the registrations of arable land, forests, beaches, islands and houses are administered by separate departments of land, agriculture, forestry and construction, with each having different registration procedures and standards.
Zhu says there are various reasons behind such a diversified scattered registration system. With the economic and social development, especially the increasing demands of the market economy for a clear property rights system, the existing registration system has showed deficiencies and cannot meet the demands of the current stage of development.
The Chinese Government decided to integrate previously scattered registration responsibilities into the Ministry of Land and Resources, which will supervise the realty registration nationwide and establish a "basic platform" on which realty approval, transactions and registration information can be shared by different agencies. Meanwhile, the establishment of a realty information inquiry system has also been proposed.
According to Zhu, the recently held Third Plenary Session of the 18th Central Committee of the Communist Party of China decided to give the market forces full play in resource allocation. A basic precondition for the operation of the market economy is clear property rights. Realty not only represents the wealth of the people, but also serves as the most important commodity in a market economy. Only clear ownership rights can protect the legitimate interests of realty holders and ensure efficiency and safety of the market transactions, hence facilitating future reforms.
Since realty registration responsibilities and management are scattered among different departments, the related information has become the exclusive resource of each respective departments. Individuals and enterprises have to go through procedures in different departments when handling credit mortgage and realty transactions. Moreover, if other departments want to obtain related information, they also have to use various channels. If departments do not cooperate with each other, there can be many disagreements.