*Show organiser warning on “dodgy” agents

The organiser of one of China’s leading overseas property exhibitions fears the market for international property in the country could be permanently damaged by an influx of unscrupulous overseas property companies.

George Betz, director of Beijing Real Estate Expo believes the success of the recent shows could attract the “dodgy agents who make promises they can’t keep” and risks tarnishing the overseas property agents working in China as “double glazing salesmen”.

According to Betz the attitude of the Chinese authorities is “broadly tolerant” towards the ownership of the international real estate but that political will could change quickly he says:

“It only takes a few stories of exhibitors taking deposits and running away for the government to change tack. The most likely move would be for the authorities to ban non-Chinese property companies from doing business at our shows. To exhibit you would need to be registered in China, undergo certain training etc”.

Betz is currently talking to a number of people about the possible formation of an industry association to bring voluntary regulation to the market. Although it is early days, he hopes the system would work in a similar way to RERA in Dubai.

Comment: China v Russia

The experience of the developing market for international real estate in Russia has parallels for China.

Both are very large, fast developing former communist states where owning abroad is highly aspirational.

Interestingly Kim Waddoup, owner of aiGroup who run the countries largest overseas property exhibitions says there have been very few problems of unscrupulous activity in Russia.

“We did have one famous overseas property company come over in 2007 and they were chased out of Russia…if you cross a Russian, it tends to be terminal. Quite a few of the timeshare guys never made it out of the country”, he says.

Waddoup believes it every unlikely the Russian government would take action even it there were evidence of unethical practice.

“As long as you pay tax, if you take your money out of the country and lose it, it’s your problem. That’s the attitude of the Russian government”.

The attitude of the Chinese is in stark contrast. The government micro manages all aspects of its economy giving sectors ratings of “neutral”, “prohibited” or “restricted” and takes a more “paternalistic” attitude towards its citizens.

A government that can “protect” its citizens from the “dangers” of Facebook and Google is more than capable of acting swiftly to put a stop unethical behaviour in the overseas property sector.

Betz has a right to be concerned. Without some form of regulation, the potential of Chinese buyer market could be curbed almost before it has really begun.

Source: Global edge

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