WHILE the 8.0-magnitude earthquake in Sichuan Province on May 12 has shocked the country and the whole world with a death toll exceeding 65,000 as of yesterday, its overall impact on the Chinese economy is difficult to evaluate at the moment.
For the country's real estate industry, it is certain that huge public attention has been drawn to the quality and safety of buildings.
Some industry experts suggest that safety and quality-related information should be provided to home buyers as a warrant against future needs.
"After the devastating earthquake, there are definitely growing concerns among home buyers over building safety, in both quake-prone and non-quake-prone areas," said Cai Weimin, an industry expert from Taiwan.
"It might be necessary in the future to allow home owners to get certain certificates in which some technical details of their houses are listed. Such papers, in my opinion, may help better guarantee buyers' interests as it can bring real estate developers very big trouble if they are found to use cheap and unqualified materials."
Cai said it doesn't matter whether home buyers can understand the technical terms listed in the certificates, because these certificates will only be used as a document with retrospective effect. Such practices have been adopted in Taiwan, though only on a limited scale, Cai said.
Lee Hing-yin, director of research and consultancy at Colliers International, echoed these thoughts.
"In the longer term, the quake will inevitably arouse investors' and occupiers' concerns about building safety and building quality," Lee said. "There is also possibility that the central and local governments may rezone or change the planning parameters - for instance, by imposing more stringent building height restrictions, thinning out development density, using better materials, standardizing the supervision on construction, and escalating safety requirements to minimize the loss from earthquakes."
As a result, property developers may put more scrutiny into site selection and pay more attention to the quality of the buildings.
Wang Shi, chairman of China Vanke Co, the country's largest residential property developer, said design and engineering experts from the company were sent to Chengdu City days after the quake to conduct technical inspections of all Vanke projects.
Though most industry experts agreed that the earthquake won't likely have any significant impact on the country's overall real estate market, its influences would be apparent in cities located in quake zones.
It would hinge on whether home buyers and investors would reappraise the risk in these cities in the aftermath of the Sichuan earthquake, Colliers International said in its latest market review.
Although most of the buildings in the more developed cities claim to be able to withstand serious earthquakes, this has not been tested. Some investors would factor in this risk when investing in property markets. This change in investors' risk appetite may ultimately be reflected in property prices in those areas more prone to serious earthquake.
Risk-averse investors would likely take a wait-and-see attitude over investment in Sichuan Province in the short term. Potential investors would likely postpone site visits to Chongqing Municipality and Chengdu City, and investment in real estate in the two cities is expected to slow down in the months ahead.
Last but not least, industry people seem to hold mixed opinions about whether developers might get good opportunities from the reconstruction of quake-hit areas.
Some believed that huge demand for reconstruction of public buildings and residential properties, coupled with the local governments' supportive measures, would present ample opportunities for the more aggressive developers.
Others said these could not be regarded as opportunities because the majority of devastated areas are remote and less-developed suburbs.