China’s property prices rose 12.4% year-on-year in May, the second-fastest monthly growth since data collection began, despite government efforts to rein in the market, Bloomberg reported. The figure, based on residential and commercial prices in 70 cities, is down 0.4 percentage points from April’s record growth. The government has already tightened sales rules for developers and raised down payment requirements and imposed mortgage restrictions on multiple-home buyers. It may also introduce a trial property tax. “So far the property tightening measures are mainly cooling transactions” rather than prices, said Xiong Peng, a Shanghai-based analyst at Bank of Communications (601328.SH, 3328.HK). “A property tax is the other shoe that has yet to drop.” It has been reported that sales in Beijing, Shanghai and Shenzhen fell up to 70% month-on-month in May, while land sales for residential development projects fell 14%.
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