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China to Introduce More Property Speculation Measures, Jones Lang Says
China’s government will issue more measures to curb property speculation because of policy makers’ determination to reduce housing prices, according to Jones Lang LaSalle Inc. Chief Executive Officer Colin Dyer.
“Prices haven’t come down despite the current measures,” Dyer, who heads the second-largest publicly traded commercial property broker, said in an interview in Bloomberg’s Shanghai bureau. “The government will increase measures as it is determined to see prices decline.”
Housing transactions in cities including Shanghai jumped in August from July, according to real-estate data providers, even after the government intensified a crackdown on speculation in April to cool record price gains. Property prices in 70 cities rose 10.3 percent in July from a year earlier, according to official data. Data for August is due to be released as soon as tomorrow.
The government may increase mortgage rates and cash down payments for home purchases and limit individuals to owning only one home if residential prices don’t decline, said Dyer, who is based in Chicago. A tax on property ownership may be introduced in “two to three years” after a period of study and consultation, he said.
Real-estate stocks slumped yesterday after a newspaper reported that the government may introduce a second round of measures and Citigroup Inc. said extra steps are “very likely.” The benchmark Shanghai Composite Index fell 1.4 percent to 2,656.35 at the 3 p.m. close, with a gauge of property stocks dropping the most since Aug. 25.
New Measures
Further tightening measures may include restrictions on pre-sales of apartments and curbs on the discounts banks can offer on mortgages, Citigroup economist Ken Peng said. The 21st Century Business Herald reported yesterday that the government may stop loans to developers, force the lowering of home prices and impose a ban on third-home purchases.
The measure tracking real-estate developers traded in Shanghai has plunged 27 percent this year, the worst performer among the five industry groups on the benchmark Shanghai Composite Index.
Jing Ulrich, chairwoman of equities and commodities at JPMorgan Chase & Co., took the opposite view, saying that government plans to boost the supply of affordable housing will lower prices and additional measures aren’t needed.
Earlier measures have included a ban on loans for third- home purchases and raising mortgage rates and down-payment requirements for second-home purchases.
China’s real-estate market is in a “very big bubble” that may last until the government increases interest rates and introduces a real-estate tax, StarRock Investment Management said Sept. 2.
--Chua Kong Ho in Shanghai, Susan Li in Hong Kong. Editors: Richard Frost, Andreea Papuc
To contact the Bloomberg News staff on this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Susan Li in Hong Kong at sli31@bloomberg.net
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