China issued stricter measures Friday to cool the heated property sector before the annual parliament session, amid public hope of pulling down soaring home prices.
The central government said in a notice that homeowners who sell their homes will be levied an income tax as high as 20 percent of the profit they make on the transaction. Prior to the new rules, income tax was 1 percent to 2 percent of the sale price. >>>More
Whether or not to buy an apartment, one the one hand, has become a big headache for Liu Yan, 27, an engineering designer in Shanghai, after the State Council on Friday ordered a 20-percent individual income tax be levied on capital gains by home sellers.
With the move popularly regarded as the Chinese Cabinet's latest move to curb property speculation, Liu doubts the regulation will make much difference. >>>More
People queue in front of a Real Estate Exchange Center on March 3, 2013, in Minhang District, Shanghai. [Jing Wei/ Asianewsphoto]
The sternest tightening policies, on the other hand, are spurring property transactions on the secondary market in some first-tier cities.
In a property exchange center in Shanghai's Pudong New Area, both the first and second floors were packed with homebuyers and property agents on Monday. People waited in long lines to complete their transactions as soon as possible to avoid the heavy tax. >>>More
Newly-issued property curbs to reduce housing speculation and cool the overheated property market have also stirred fierce discussion online.
As of Monday, Sina Weibo users had posted more than 1.5 million comments to voice their recognition of, or concerns about, the policy that features a much higher tax on used home transactions.>>>More
Home prices in China rose for the ninth consecutive month in February, though at a slower pace, with nearly three fourths of the cities monitored by a key research institute seeing gains from January.
The average price of new residential properties across 100 major mainland cities climbed 0.83 percent from a month earlier to 9,893 yuan (US$1,575) per square meter, decelerating from January's 1 percent increase, the China Index Academy said on March 1. >>>More
The continuous rising home price has triggered worries of mounting risks in the country's property market.
"We see continuing risks in China's property market and believe the country's newly elected leadership will be proactive in implementing existing policies to control the property market and seek to introduce new cooling measures if upside risks intensify in certain cities or regions," said Shen Lan, an economist at Standard Chartered Bank
But the government may tolerate a pickup in the sector as long as price increases remain in line with underlying fundamentals, according to Shen. "That said, continuing policy pressure should ensure that any upward pressure on home prices is kept in check," she added. >>>More
Property developers, fueled by improved cash flow, are still quite optimistic about the market and are strengthening their competition for more land parcels.
In Beijing, a total of 13 land parcels valued at 10.7 billion yuan ($1.7 billion) were sold on Thursday, with the premium price dropping compared with the end of last year, real estate Web portal Soufun reported on Friday.
Thirty-three real estate companies competed for the land parcels. The highest price premium was 50 percent, much lower than the record of 400 percent recorded at the end of 2012, according to the report. >>>More
Yi Xianrong, a research fellow at CASS's Institute of Finance and Banking, said the housing market should be dominated by a need for accommodations instead of investment purposes. This is what the Chinese government has continuously emphasized when introducing tightening measures to crack down on speculative home purchases.
"The key lies in how to shift demand to accommodation needs instead of investment. The government still has policy reserves that could be used to achieve that aim, such as taxation and mortgage policies," said Yi. >>>More
