For many foreigners, investing in property in China isn't easy. Just ask Tom Luckock.
Luckock, a 32-year-old Australian lawyer who has lived in Beijing a total of six years, owns two siheyuan - or "four-sided courtyards" - tucked away in Beijing's historic hutong alleyways. He bought the first 190-sq-m home two years ago, after four years of searching and several collapsed deals.
The second, a 326-sq-m siheyuan, Luckock bought last year, after negotiations with five different owners and a title dispute involving illegal squatters. He was forced to buy the property in his fiance's mother's name to get around a new law restricting to one the number of properties foreigners can own.
Along the way, Luckock faced challenges ranging from price and location to disputes with builders and neighbors.
"It's a long-term investment," Luckock says, "but a risky one."
Not only do foreigners like Luckock face the significant cultural and practical difficulties of buying property in China, they must also battle recent legislation designed to limit foreign ownership in order to tame a soaring real estate market.
Early this year, a new rule was announced requiring foreigners living in Beijing to get certificates from the Beijing Municipal Public Security Bureau to prove they have been in China for at least one year for work or study before buying property.
The rule also banned foreigners from buying more than one house or using it for anything other than residential purposes.
"It is understandable for the government to rein in foreign investment in the property market when supply can barely meet the huge domestic demand," says Eric Chan, deputy managing director of Savills, a UK real estate services provider.
The rule was a follow-up to a previous attempt by the government to curb speculation in the property market. In July 2006, six ministries led by the Ministry of Construction issued a statement requiring foreigners to live in China for at least a year before being allowed to buy a house. But once it became clear that the statement did not include any measures for enforcement, property developers in the capital once again started accepting subscriptions from foreign buyers.
The government has also clamped down on overseas residents - including those from Taiwan Province and the Hong Kong and Macao special administrative regions, as well as Chinese living abroad - from buying property on the mainland.
As of last January, overseas residents looking to buy property in Beijing require a residential status certificate. To get that, they need to provide a passport, documents to prove they have worked or studied in Beijing for over one year, papers verifying their present address and two passport-sized photos.
Overseas residents also now require a signed testimony saying they will live in the house and not rent it out or sell it.
Chan says that the rules are not meant to prevent foreigners from buying houses for their own living purposes, but instead to curb investment demand, particularly among commercial investors.
Though the process has become more complicated, he says foreigners' demand for housing remains strong.
"I've talked with many foreigners. Most of them show great interest in China's property market, despite the restraining measures," says Chan. "Just think about it - there are more than 100,000 foreigners living in Beijing, and the number is growing, helped by the expansion of multinational companies."
He suggested that the government expand investment channels for foreigners while curbing their investment in the property market.
Some experts, however, argue that foreign investment has not largely contributed to rising property prices, and that it should actually be welcomed, not discouraged.
"There's a sentiment that foreigners are driving up the real estate market, but in reality there's an excess of liquidity in the market and high demand for real estate in general," says Anna Kalifa, head of research, Beijing, for Jones Lang LaSalle, a leading global real estate services and money management firm.
In fact, foreigner buyers, including commercial and private investors, account for just 5 percent of China's real estate sector, and they are largely concentrated in the luxury market, Kalifa says.
The causes of soaring property prices in recent years have been deregulation, membership to the World Trade Organization, excess liquidity in the market, high savings rates and a need to invest, she adds.
Kalifa says that instead of discouraging foreign investment in the real estate sector, China should welcome it. Foreign investment increases transparency and the availability of public information, and it institutionalizes real estate investment, including best-practice standards and a better legal framework.
Despite the new regulations, foreign investors - both commercial and private - remain hungry for a piece of China's real estate market, especially in cities like Beijing.
"It's recognized that Beijing is an international city," says Luckock, "and part of being an international city is that foreigners own property in that city, just like London, New York and elsewhere."