[photopress:housing_presale.jpg,full,alignright]There will probably be more restraining policies on the property sector over the next few months as the government tries to to rein in the real estate sector which is spiraling somewhat out of control.
Zhu Zhongyi, secretary-general of the China Real Estate Association, said soaring property prices raise the possibility that further cooling measures could be on the horizon.
Zhu Zhongyi said, ‘The government may launch measures targeting some key cities if property markets there get out of control. Or it could release uniform policies covering the entire country.’
According to the National Development and Reform Commission (NDRC), property prices in China’s 70 large- and medium-sized cities climbed by 7.1% year-on-year in June. And that is the highest it has been since last year.
Real estate investment jumped by 28.5% year-on-year, topping RMB988.7 billion in the first six months.
Zhu Zhongyi said, ‘Given the accelerating growth in prices, the government’s attitude on restraining foreign investment in the property market shows no signs of loosening in the next half-year.’ He added that although foreign investors are not the major driving force in increasing property prices, their overall impact cannot be overlooked.
With strong capital backing, foreign investors usually offer higher prices when bidding for land, potentially boosting property prices around the region.
According to Yang Hongxu, an expert with E-house China R&D Institute, there may be stronger policies in the pipeline. He said foreign acquisition of entire buildings might be prohibited or more restrictive measures may put on foreign-funded development of high-end properties.
A contrarian view was presented by Pan Shiyi, chairman of SOHO China, a Beijing-based property developer who said, ‘A less-developed pre-owned house market, curbed by too much taxation on transactions, is the crux of the imbalanced market.’On the other hand Liu Futan, ex-director of the macro-economy institute of the NDRC, called for the levy of a property tax as soon as possible.
Liu said, ‘As a tax levied on the ownership of property, it helps to reduce speculative investment into the real estate market.’ Indeed, there seems to be no consensus of opinion as to what action should be taken.
Source: China Daily