Chinese Real Estate Slowdown Opens Avenues to Reform

With nationwide housing construction activity set to decline further in the coming months, China's central government has signaled it intends to use the real estate sector slowdown to push through a number of long-stalled fiscal and administrative reforms in 2015. Chief among these initiatives will be the establishment of a national property registration system. The State Council, China's Cabinet, published preliminary rules for the system Dec. 22. Though it will be several years before a fully functioning registry is in place, the effects of provisional regulations, set to begin March 1, 2015, will be felt far sooner in Chinese property markets. In addition to further curbing speculative home purchases — and likely further depressing home prices in many cities, at least in the short-term — the rules will give central authorities a powerful new tool in the fight against local-level official corruption.