China May Set New Property Controls Soon, Securities Says
China may set new property controls as early as this month after the central government’s inspection team returns to Beijing, the official China Securities Journal reported today.
The government has some room to issue more policies, including raising the transaction tax on existing homes and expanding a property tax trial, the newspaper reported, without saying where it got the information. The policies will be based on inspection results and likely be this month as the government may want to avoid the traditional property sales season in September and October, it said.
Premier Wen Jiabao has said the government will “unswervingly” continue property controls it began introducing in April 2010 to ensure housing remains affordable. China sent eight teams to 16 provinces in late July to check on the implementation of its property curbs, according to a statement on the central government’s website on July 25. The nationwide check is aimed at “firmly” restraining property speculation and consolidating results of the curbs, it said.
“The report is more of guessing and speculative; it’s very unlikely for the government to rush new property policies this month,” said Eric Zhang, a Beijing-based property analyst at China International Capital Corp., the country’s biggest investment bank. “But the central government is likely to set an accountability system with local governments on home prices.”
Private data is signaling a turnaround in the real estate market. Home prices in July posted the biggest gain in more than a year, according to SouFun Holdings Ltd. (SFUN), the country’s biggest real estate website owner. They rose 0.3 percent from June.
New home prices in June climbed in the most number of cities in 11 months as buyer sentiment improved after the central bank cut interest rates. Prices gained in 25 of the 70 cities the government looks at, the most since July last year.
The inspection team criticized four provinces -- Hubei, Hunan, Hebei and Shandong -- for not “strictly” implementing property control policies, Caixin Online reported yesterday, without saying where it got the information.
China won’t relax housing curbs until the industry becomes “healthy” again, Yu Liang, president of China Vanke Co. (3333), the country’s biggest developer by market value traded on the nation’s exchanges, said yesterday.
“For the central government to begin relaxing the measures, the industry must first return to a healthy state,” said Yu. “When that will happen, I don’t have a definite answer.”
China’s home purchase restrictions are part of a long-term plan to control the property market and the government is unlikely to scrap policies within the next two years, Shanghai Securities News reported today, citing Wang Juelin, a researcher at the Ministry of Housing and Urban-Rural Development.
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