After major Chinese cities posted nearly double-digit price gains in August, authorities are moving up the implementation of a property tax in order to cool the market. Housing affordability remains a critical issue in China, leaving open the possibility of additional market constraints to ward off speculation and a real estate bubble. See the following article from Property Wire for more on this.
China is getting ready to introduce property tax measures to cool its real estate market and they could come as early as next month, it is claimed.
The new tax, which will apply to residential and commercial property, had been expected for next year but now officials are indicating it could come earlier.
It is due to concern about rising property prices which increased by 9.3% in 70 major cities in August despite a rash of cooling measures aimed at stamping out speculation and restricting the number of properties that can be owned.
According to Zhu Zhongyi, vice chairman of the China Real Estate Association, developers should be pricing homes more reasonably and if they don’t they should face tougher tightening measures.
Property prices in urban China are too high and ‘difficult to accept’, according to a third quarter survey of urban households by the People’s Bank of China. The percentage of urban households that expect further house price gains rose 7.2% from the second quarter to 36.6%, the report said.
China has raised the down payment and interest rates on second home mortgages and restricted the number of new homes residents can buy in some cities to try to prevent a property bubble.
But a recovery in property transactions even as price gains slow suggests policy makers will probably introduce further tightening measures, according to Credit Suisse Group AG analysts Jinsong Du and Ronney Cheung. Sales by value last month rose about 15% from July.
But not everyone agreed. Jing Ulrich, chairwoman of China equities and commodities at JPMorgan Chase, said that China doesn’t need additional measures because an increasing supply of affordable housing will dampen prices.
And BNP Paribas said in a report it thinks the government will probably not introduce further measures to curb the real estate market as they focus on implementing existing policies.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.