Real estate sector at crossroads

Buildings in Beijing being constructed by Poly Group. The group entered the real estate industry in 1992, and the revenue of its real estate unit accounted for nearly 90 percent of the group's 98 billion yuan in revenue last year. Provided to China Daily

The Chinese real estate industry has reached a crossroads, and Han Qingtao is well aware of it.

The director of China Poly Group Corporation's real estate department - the second-largest real estate company in the country - said that it is crucial that Chinese real estate companies be in top form due to changing economic circumstances.

"The Chinese real estate industry was complicated in the past few years," Han said.

"But it's vital that the industry transforms itself, and quickly, if it hopes to establish itself, especially as the market cools."

China's GDP totaled 51.9 trillion yuan ($8.47 trillion) last year, according to figures from the National Statistics Bureau, and the value of real estate contracts amounted to 6.4 trillion yuan, about 10 percent of the nation's GDP.

"There's no doubt that real estate has become one of the country's pillar industries, and it's closely linked with other industries such as steel and iron," Han said.

However, the real estate market has cooled down since 2010, when the central government introduced policies such as higher downpayments and restrictions on third-home purchases to curb prices.

In March, a 20 percent capital gains tax was imposed on second-home sales.