It comes as no surprise that with a solid recovery in the real estate market, the Chinese government will probably not continue the measures unveiled last October to boost the property sector amid the global financial crisis. This was reported by the China Business newspaper on its website.
The newspaper quoted an unnamed source close to the Ministry of Housing and Urban-Rural Development (MHURD) who said, “Those policies were effective for one year. The MHURD will not propose to extend them.”
The measures included cutting the mortgage rates by as much 30%, lowering the stamp tax on house purchases from 3-5% to 1% for first-time home buyers acquiring an apartment of less than 90 square meters, and reducing the down payment requirement to 20% from 30%.
These measures were, according to the source, implemented by the Ministry of Finance, the central bank and the State Administration of Taxation.
China View reports that thanks to these policies and rising demand, China’s property market has seen price and sale hikes after February this year. The net profit of China Vanke, the country’s largest property developer by market value, jumped nearly 30% year on year to about RMB3 billion ($439 million) in the first three quarters of this year.
Figures from the National Bureau of Statistics indicated that housing price in 70 of China’s large and medium-sized cities rose 2.8% in September compared with the same month last year. On a month-to-month comparison, it was 0.7% higher than in August, and it was the seventh straight month of price increase of housing price.