Premier Wen Jiabao said on Jan. 18 that the government will “resolutely” implement controls on the real-estate market in the first quarter, including curbing speculation and increasing supplies of affordable housing. Property prices rose for a 19th month in December, even after the government suspended mortgages for third-home purchases and restricted loans to developers.These changes must be having an effect (at least at the development level) given the rush into synthetic Dim Sum bonds as a source of alternative financing for property development.
China is expected to introduce a 0.8 percent real estate levy, which will have a limited impact on the market, according to a Nomura Holdings Inc. Jan. 10 report. The tax will probably be introduced in Shanghai and Chongqing, and rolled out to other so-called overheated cities such as Beijing, Shenzhen and Hangzhou, Nomura analysts led by Alvin Wong said in the report.I agree it will have little impact on prices. It might drive up rents, however.
Land for affordable housing, reconstruction of shantytowns, and medium and small commercial houses should be no less than 70 percent of the regional government’s total supply, it said.
Regional governments should also “strictly” formulate property purchase policies and local residents with two homes will be banned from further purchases, it said.