The real estate industry is set to receive a special stimulus plan which may include an easing of curbs on purchase of second homes, expanding funding channels for developers as well as a further cut in home purchase-related tax and fees, official media reported on Monday.
The plan is still waiting for approval from the State Council, China's Cabinet, they reported, adding that the property sector, hit by sluggish sales and lackluster market sentiment, is the last among 10 industries to receive help from the central government.
"In my personal view, the industry-specific package, if approved by the State Council, may incorporate schemes favorable to both home buyers and developers," said Lu Qilin, deputy head of research at Shanghai Uwin Real Estate Information Services Co. "For example, restrictions on second homes might be lifted, developers may find it easier to raise funds in the future or get access to new channels such as real estate investment trusts, and it could also be expected that tax and fees levied on home purchases might be further reduced."
The National Development and Reform Commission, the top economic planning body, is now reviewing proposals submitted by the Ministry of Housing and Urban-Rural Development, China Securities Journal reported yesterday, citing an unidentified source.
"The package will probably focus more on rendering support to the industry from a long-term perspective," said Zhang Qi, an associate director at China Index Academy, a real estate industry research body. "The package would probably offer some guidelines for the future development of the industry and include policies to help relieve developers' financing burdens."
While there is general agreement in the industry the package would influence the future development of the real estate industry positively, some experts voiced whether it is a good time to introduce the plan now when home prices are still too high for most buyers.
(Shanghai Daily February 24, 2009)