Developers should pursue other industries amid Beijing’s property controls, says real estate tycoon

Billionaire Sun Hongbin advised them to focus on consumption projects instead

During a speech in Beijing earlier this week, billionaire real estate tycoon Sun Hongbin urged developers to expand into other industries as Chinese officials will unlikely relax their restraint on the domestic property market, reported South China Morning Post.

Sun, founder and chairman of Hong Kong-listed property developer Sunac, said, “Moving the economy away from relying too much on real estate is highly political and it is the country’s choice for a long-term strategy. We must understand this adjustment.”

He said that most people are waiting for the housing market to falter because of the pressure, but he believes that it will not.

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Sun ranked as the 20th richest man in China this year, according to a list compiled by Forbes. His recent speech emphasised the issue that the real estate industry in China is facing because of the government’s heavy-handed approach to tackling the housing market and the economy.

Beijing and the local government has introduced a number of measures to delay the increase of house prices, including establishing price caps on new houses, raising down payment requirements, regulating property sales to locals, and tightening finances flowing into the sector.

“For real estate companies, this control [from Beijing] must not be regarded as short-term, it is for the long-term, and it is a national strategy,” reiterated Sun.

He further advised the industry to lower its reliance on housing sales and consider offering more “value-added” projects that focus on consumption, including healthcare, education, and tourism.