The result was that Poly Real Estate, China’s second-largest developer by market value, slid 2.2% and Industrial Bank, part-owned by a unit of HSBC, fell 3.4%.
Zhao Zifeng, who helps oversee about $10.2 billion at China International Fund Management, said, “There’s uncertainty over the government’s policy on the property industry. For the broader market, the situation is bright as listed companies are expected to achieve growth for a second straight year amid the economic recovery.”
In Shanghai home buyers must prove they are first-time purchasers before they can benefit from a reduced tax on property transactions.Separately, Guangzhou’s government has announced tougher penalties for developers hoarding land.
Ma Jun, chief China economist at Deutsche Bank AG in Hong Kong, said in a note: “These policy changes will likely raise the transaction and funding costs of most speculative transactions. Other major cities such as Beijing, Guangzhou, Shenzhen and Hangzhou will likely follow suit.”
Bloomberg reported that Premier Wen Jiabao pledged Dec. 27 to tackle “excessive” property-price gains in some cities, using tools including taxes, loan rates and the construction of more low-cost housing.