China mulls more regulation of property market

0 Comment(s)Print E-mail Xinhua, January 31, 2012
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China is mulling a new round of efforts to regulate the sizzling property market after the moves it imposed about a year ago to limit purchases of residential apartments effectively brought down prices, analysts said Tuesday.

Minister of Housing and Urban-Rural Development Jiang Weixin revealed that the ministry would complete a project to link databases of personal housing information concerning 40 major cities by the end of June, a measure designed to further curb house speculation, the analysts said.

Since 2010, China has imposed a raft of measures to cool the property market -- including tighter credit supply, higher down payments and limiting the number of homes that people can own.

Though most cities restrict or ban their residents from buying second or third homes, there is no restriction on the number of residential apartments a person can buy in different cities.

The government's latest move would enable it to catch people who amass houses across different cities and lay the foundation to levy property tax nationwide, said Zhang Dong, head of the property research institute at Central South University.

Zhang Dawei, an executive of property agent Centaline, said the government is expected to place heavy taxes on people who own multiple houses in different cities, a bid to crack down on property speculation.

China's property market took off after the government implemented housing market reforms in 1998. But prices have grown out of control in recent years, especially in the wake of the 2008 financial crisis, when the government implemented a massive stimulus package and ordered banks to flood the market with credit.

To rein in runaway property prices, China's central government in April 2011 started to restrict residents in 43 major cities from buying second or third homes, effectively bringing down property transaction volumes in many cities.

Since then, China's property market has been showing signs of cooling as more cities reported drops in prices of residential apartments by the end of last year.

In December, 52 out of a statistical pool of 70 major cities saw drops in new home prices from November, compared with 49 cities the previous month, the National Bureau of Statistics said recently.

On a year-on-year basis, nine cities out of the 70 saw new home price declines in December, up from four in November. Growth of new home prices eased in 55 cities, it added.

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