China’s latest clampdown on housing market speculation is only skin-deep, leaving fundamental land and fiscal problems unresolved, analysts say. While the newly imposed measures appear harsh by banning many potential buyers from buying property and squeezing bank supply for property deals, many rules are merely top-ups of existing restrictions to further depress demand, and fail to address the root problems underlying China’s property market frenzy. These include local government reliance on land deals for revenue, the absence of a property tax to discourage speculation. According to the South China Morning Post, local authorities still rely on selling land for income, an increasingly sought-after asset in large cities as supply dries up, so they have the least incentive to engineer a fall in property prices.
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