Foreign investment into real estate tightened

A notice jointly released by two of China's top regulators said that a stricter approval process will be applied to foreign investment in real estate, especially in the high-end sector.

The notice, published by the Ministry of Commerce (MOFCOM) and the State Administration of Foreign Exchange (SAFE), requires all foreign real estate companies that have been approved by the local government to be put on the record of the MOFCOM in the future.

MOFCOM will also have final say in the approval of projects. Experts say that this will give the Commerce Ministry a better idea of the scope of the Chinese real estate market.

A strict limit on foreign investors' application to set up real estate companies will also be imposed. Only those with land-use rights and own property can establish real estate companies, the China Daily report said.

Local bureaus have also been asked to stop the practice of foreign investors taking over local project companies.

However, experts believe that the move will do little to restrain the interest of overseas investors who are attracted to the strong growth prospects of the Chinese market.