Private Equity Investor Calls for Complete Removal of Home-Buying Restrictions in China
Breaking News: Private Equity Investor Calls for Removal of Home-Buying Restrictions in China
In a bold move that could shake up the real estate market in China, one of Asia’s top private equity investors is advocating for the complete removal of home-buying restrictions in the country. Shan Weijian, executive chairman of Hong Kong-based PAG, argues that China is not facing a severe oversupply of residential housing, contrary to popular belief.
Shan believes that the current buying curbs in China are hindering the market’s growth, and it’s time to eliminate them altogether. He pointed to Hong Kong as an example where the property market saw a boost after all demand-side restrictions were removed by the government.
The co-founder of PAG, which manages over $55 billion, dismissed concerns about oversupply in China’s residential market and labeled statements suggesting so as “nonsense.” He emphasized the importance of maintaining confidence in the real estate sector to sustain the economy and attract global investors.
Despite China’s real estate slump entering its fourth year, Shan remains optimistic about the market’s potential. He cited strong sales for second-hand homes last year as evidence of continued demand.
Shan highlighted the need for major shareholders of Chinese developers to bear the losses from debt restructuring and bankruptcy, rather than creditors. He criticized the impact of the real estate crisis on global bondholders, with over 250 dollar bonds issued by Chinese firms defaulting.
PAG, a significant investor in Dalian Wanda Group Co.’s mall operator, is closely monitoring the situation. Shan warned that the diminishing value of homes in China is dampening consumer spending and urged for the removal of buying restrictions to stimulate economic activity.
As China grapples with a “severe task” in stabilizing the real estate market, Shan’s proposal could spark a much-needed debate on the country’s housing policies. It remains to be seen whether the government will consider his recommendations in light of the current economic challenges.
Stay tuned for updates on this developing story.
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