Please download here: ChinaDaily_2010.4.29.pdf
The central government and the HKSAR government have recently been rolling out new measures aiming to curb the overheating property markets.
The March figure of 11.7 percent year-on-year rise of both residential and commercial real-estate prices released by the National Bureau of Statistic serve as warning signs for the mainland property sector Realizing the re-imposed sales tax and mortgage rates hikes earlier this year failed to contain housing prices against the speculative activities, the State Council introduced the series of new measures in an attempt to cool off the hot sector.
On April 15, the State Council lifted mortgage rates to 1.1 times the benchmark lending rate and raised the down payment requirement to 50 percent from 40 percent on second-home mortgages. In addition, land supply for new home building increased to 180,000 hectares from 76,500 hectares in 2009. Finally, bank loans were restricted for third home purchases if buyers fail to provide tax returns or proof of social ecurity contributions.
If these new policies have not been enough to demonstrate the determination of the central government to contain surging property prices, then new restrictions announced on April 20 to avert hoarding of inventory by developers should have ensured that some clear statements have been delivered.
The message is clear: zero tolerance of asset bubble formation in the nation’s housing market, despite the housing sector’s accounting for approximately 10 percent of the economy, as well as being a major source of income for local governments.
Tracing limited similarities to stock markets or other asset classes, crashed property markets could take up to seven years or longer to recover, and new highs in some extremely hot sectors may take decades to be reached again.
Concurrent with the tightening up north, the
Mr. Tsang also proposed to increase the stamp duty on luxury properties to 4.24 per cent.
However, despite the accord and congruence of mainland and HKSAR government intentions, the mainland and
Instead of a change of stance to curb rising property prices, the “voluntary guidelines” came after the
It is a publicly known fact that the finance and property pillars propel the
Nevertheless, the government has many options in endeavoring to further reduce price pressure, such as increasing stamp duties on property transactions, resuming the Home Ownership Scheme or gradually increasing the supply of land. After all, a balanced housing policy is designed to ensure home prices remain within the parameter of affordability for the general public. The government should act if external factors distort prices, stability and cohesiveness of a society. A destructive environment will most definitely choke off the productivity of the golden goose, if not suffocate it.