Guangdong's guidelines on property get mixed response

Shanghai Daily, March 27, 2013

Guangdong became the first province in the country to release guidelines on strict implementation of property tightening measures but an analyst yesterday called the guide "too mild and lacking concrete contents."

In a statement posted on its official website on Monday, the provincial government said Guangzhou, Shenzhen, Foshan and Zhuhai must continue to enforce curbs on home purchases vigorously while Guangzhou and Shenzhen should also report their 2013 targets to control housing prices by the end of this month.

Areas where property prices are rising rapidly must impose a 20 percent capital gains tax as required earlier by the central government, according to the statement.

But Sky Xue, an analyst with China Real Estate Information Corp, said the guidelines seem to be a very 'mild' version.

"There is no clear requirements regarding the implementation of a capital gains tax as the market expected earlier and the provincial government hasn't mentioned anything about its policy involving home mortgages. Moreover, we don't see any further tightening on home purchase restrictions either," Xue said.

The State Council, China's Cabinet, said on March 1 that it planned to levy a 20 percent capital gains tax on property deals and banks may ask for higher down payments and mortgage rates for second-home purchases if prices rise too fast.

Yang Hongxu, vice director at E-House China R&D Institute, a major property services provider and research body, in the country, however, said the guidelines were within his expectations.

"Actually it was no surprise to me because I didn't really expect many 'details' in the provincial-level guidelines," Yang wrote on his blog on "In the next few days, we may probably see Guangzhou and Shenzhen release their own city-level guidelines and that might include more details in practice."

A Guangzhou resident surnamed Zhang said he is concerned about the new housing measures, but was disappointed by the announcement.

"The measures outlined by the Guangdong government failed to specify the two core issues: income tax and housing price control targets," Zhang told Xinhua news agency.

China has asked local governments to work out specific schedules by the end of March and said it will enhance inspections of provincial-level governments' property market control efforts. Those who fail to meet their targets will be penalized, the central government said.