Southern Chinese city caps housing prices

The industrial city of Zhongshan in the southern Chinese province of Guangdong is the most recent municipality to impose price caps on new apartment sales, in a continued effort to cool the property market, The Wall Street Journal reported. The measures restrict sales to no more than RMB5,800 (US$914) and will continue until the end of the year. Analysts were skeptical that the cap will affect many transactions, since they are temporary and only apply to new homes. Nearly 50 cities throughout China have imposed various restrictions on the property market, including new property taxes in Shanghai and Chongqing. Economist Yiping Huang at Barclays Capital believes that the measures have been largely effective in 2011, though actual government targets are not known. “Our best guess, however, is that the government (wants) to see declines averaging 10-20%,” he said.