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China economy
EconomyChina Economy

China developers should consider other industries as Beijing unlikely to ease property controls, tycoon says

  • Beijing has decided that the Chinese economy needs to reduce reliance on real estate industry, says Sun Hongbin, majority stockholder in Sunac
  • Current property market controls are unlikely to be relaxed in near future, Sun says

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Sun Hongbin, majority stockholder in Sunac, says Chinese property developers must adjust to Beijing’s strict real estate controls. Photo: Edmond So
Amanda Lee

The Chinese government is unlikely to ease its controls over the domestic property market, so developers should consider branching out into other industries, according to billionaire real estate tycoon Sun Hongbin.

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“Moving the economy away from relying too much on real estate is highly political and it is the country’s choice for a long-term strategy. We must understand this adjustment,” said Sun, the founder and chairman of Hong Kong-listed property developer Sunac, in a speech in Beijing on November 5 and published on Wednesday in local media.

“Many people think that the pressure [on the housing market] is so big now, when will they ease? I say it is unlikely [that they will do so],” he added.

The speech by Sun, who was ranked at No 20 on Forbes’ China rich list this year with an estimated net worth of US$10 billion, highlights the dilemma facing China’s real estate industry given the government’s increasingly heavy-handed approach to managing the housing market and the economy. Beijing and local governments have sought to crack down on speculation in the real estate market and hold the rise in housing prices by introducing a series of measures such as tightening funds flowing into the sector, restricting property sales to local residents, increasing down payment requirements and putting price caps on new houses.
For real estate companies, this control [from Beijing] must not be regarded as short-term, it is for the long-term – and it is a national strategy
Sun Hongbin

While the downward pressure on Chinese growth is likely to grow in coming years, Beijing is unlikely to make a U-turn in its strategy to take the steps necessary to achieve “high-quality growth”, Sun said.

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