Land transfer fees in China reportedly reached a record high of RMB 6.5 trillion ($986 billion) in 2018, according to the country’s largest investment bank CITIC, who added that the increase was largely due to higher levels of activity in less developed third- and fourth-tier cities, reports Caixin.
Despite the surge, CITIC does not believe that the trend will continue this year and predicted that land transfer fees will fall by 18.6% to RMB 5.3 trillion.
The majority of the growth occurred before the property market entered a downward spiral during the third quarter of last year after the government began to crack down on easy financing for development and as the effects of the trade war with the United States started to affect the nation’s growth.
The government’s campaign and the slower economy have made it more difficult for buyers to hand over down payments and get mortgages as well as for developers to sell houses in their inventories, leading to a drop in confidence among both developers and buyers.
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