China Economic Review
Charting China’s changing economic terrain · Since 1990
Property rules start to bite
May 5, 2010
The results of the government’s new building policy is just beginning to bite. Prices had been skyrocketing, with a nearly 12% increase in prices in cities this past March, as compared with a year ago. Beijing has now clamped down even further by limiting apartment purchases in the city to one per family, which by cutting the potential market may bring the prices down.
The shares have already been affected. Today Poly Real Estate, which builds developments with catchy names like, "The Circle Pursuit of Perfections" and "Champagne Garden" plunged 7.5%, Gemdale plummeted 4.6% and China Vanke was down 4.5%.
Daily Finance reported that in Hong Kong, property shares dragged the Hang Seng index lower. The territory’s government is also imposing restrictions on property sales, introducing rules regarding the number of properties each buyer is permitted to purchase and raising taxes.