Beijing's property market should prosper further when the municipal government lifts the restriction on foreigners and Chinese from outside the city buying commercial housing in the capital, officials and experts said yesterday.

The Beijing Municipal Bureau of Land, Resources and Housing Management announced yesterday that it would officially lift the distinction between commercial housing sold to local people and that to outsiders from September 1.

Currently, foreigners and Chinese from Hong Kong, Macao and Taiwan can only choose housing from a restricted selection. Mainland Chinese without a permanent residence permit for Beijing are also affected.

But next month these so-called outsiders will be able to choose from all housing on the commercial market for the same cost as local people would pay.

Beijing is the first mainland city to completely lift this distinction, although small pilot programs have been carried out in areas of South China's Guangdong Province.

Lin Tao, deputy manager of the Beijing office of the Japanese company Daidoh, said: "Most of my friends regard the abolition as a piece of good news because it allows people from outside Beijing to choose local property from a much wider range, no longer only restricted to a few lavish but very expensive properties in selected areas."

But Shell Xue, China program director of Project HOPE, a US-based international health welfare organization, said she was very worried that the flat she bought at the price payable by outsiders might suffer devaluation.

Sun Xiwen, an expert with the Chinese Academy of Land and Resources Economics, said such worries may be "unnecessary if Beijing's overall economy can continue to develop at a fast speed, attracting more outside investors, and if the house is in an excellent location as most of them are."

"We have not yet done careful calculations but our initial impression is that the policy will help maintain Beijing's real-estate prices at their present level," said Sun.

Chen Tongshun, director of the bureau's Market Management Division, said the move was an attempt to build an open property market and thus fulfill one of the commitments China made when it joined the World Trade Organization last November. He dismissed speculation that the new policy would stir Beijing's property market very much.

"The present commercial housing aimed at outsiders will continue to attract people who care more about comfort with unique taste and outstanding facilities," he said.

But the change will mean a wider choice for the middle group of mainly well-paid employees, the self-employed and owners of small businesses, he said. "For those from outside Beijing, the change means cheaper property," said Sun.

(China Daily August 14, 2002)