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Strictest rules yet in bid to curb housing market
By Zhang Fengming |
January 27, 2011, Thursday
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Print Edition
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Buyers of second homes in China will have to put down 60 percent of the price, it was announced yesterday, up from the current 50 percent in the country's latest bid to curb property speculation.
The State Council, or the Cabinet, also said that buying a third home in the city where residents already have two is banned. And residents could only buy one home elsewhere.
Also, families will be banned from buying any homes in cities if they have not been long-time residents and cannot provide tax or social insurance certificates to show their length of residence.
The measures were among eight new government actions to combat soaring home prices. Others prevent land hoarding and tax properties sold within five years of purchase on the total value rather than the profit.
The State Council is also ensuring a supply of affordable homes with a ruling that land for such properties should account for at least 70 percent of new land earmarked for housing.
"The measures can be counted as the fourth round of tightening since previous attempts in last January, April and September," said Yang Hongxu, a researcher at E-house China R&D Institute. "The timing is urgent and surprising, indicating that the central government is not happy with results of previous measures.
"Authorities are unwilling to see a further rise of home prices against the backdrop of high inflation."
Inflation rose 3.3 percent in 2010, faster than expected.
Local governments are for the first time required to set a home price target for this year and publish it in the first quarter. If prices rise beyond the target, local governments should be punished, the Cabinet said in statement yesterday.
People have blamed the unwillingness of local governments to implement the Cabinet's tightening measures on the fear of losing revenue from land auctions.
There is speculation that this was part of the reason why existing policies were having little or no effect.
Across the country, real estate sales continued to record double digit growth in both volume and price over the past 12 months.
The statement made no mention of the much talked about property tax trial.
Chongqing has disclosed details of its property tax on the high-end market. Shanghai has yet to unveil its plans although there is speculation it could be as high as a 4 percent of the value of larger homes.
"The new measures sound harsh," said Zhang Liping, an office worker in Shanghai. "But I am more curious about the property tax trial."
"I don't know whether the new measures will achieve their aim," said Huang Lei, a 20-something office worker. "All I know is that the stock market for sure dropped on such measures, but home prices still kept rising after a short period."
Huang Jin, a Shanghai resident who has yet to find a job, is more cynical. "Measures always sounds serious, but what I know is that some people who already own four homes can be treated as second home buyers to duck harsh tightening. I don't know how, but I do know they make it."
Across the country, the prices of new and existing homes jumped 7.6 percent and 5 percent in December from a year earlier. In Shanghai, they rose 1.3 percent and 3.3 percent.
The State Council, or the Cabinet, also said that buying a third home in the city where residents already have two is banned. And residents could only buy one home elsewhere.
Also, families will be banned from buying any homes in cities if they have not been long-time residents and cannot provide tax or social insurance certificates to show their length of residence.
The measures were among eight new government actions to combat soaring home prices. Others prevent land hoarding and tax properties sold within five years of purchase on the total value rather than the profit.
The State Council is also ensuring a supply of affordable homes with a ruling that land for such properties should account for at least 70 percent of new land earmarked for housing.
"The measures can be counted as the fourth round of tightening since previous attempts in last January, April and September," said Yang Hongxu, a researcher at E-house China R&D Institute. "The timing is urgent and surprising, indicating that the central government is not happy with results of previous measures.
"Authorities are unwilling to see a further rise of home prices against the backdrop of high inflation."
Inflation rose 3.3 percent in 2010, faster than expected.
Local governments are for the first time required to set a home price target for this year and publish it in the first quarter. If prices rise beyond the target, local governments should be punished, the Cabinet said in statement yesterday.
People have blamed the unwillingness of local governments to implement the Cabinet's tightening measures on the fear of losing revenue from land auctions.
There is speculation that this was part of the reason why existing policies were having little or no effect.
Across the country, real estate sales continued to record double digit growth in both volume and price over the past 12 months.
The statement made no mention of the much talked about property tax trial.
Chongqing has disclosed details of its property tax on the high-end market. Shanghai has yet to unveil its plans although there is speculation it could be as high as a 4 percent of the value of larger homes.
"The new measures sound harsh," said Zhang Liping, an office worker in Shanghai. "But I am more curious about the property tax trial."
"I don't know whether the new measures will achieve their aim," said Huang Lei, a 20-something office worker. "All I know is that the stock market for sure dropped on such measures, but home prices still kept rising after a short period."
Huang Jin, a Shanghai resident who has yet to find a job, is more cynical. "Measures always sounds serious, but what I know is that some people who already own four homes can be treated as second home buyers to duck harsh tightening. I don't know how, but I do know they make it."
Across the country, the prices of new and existing homes jumped 7.6 percent and 5 percent in December from a year earlier. In Shanghai, they rose 1.3 percent and 3.3 percent.
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