Economy

Homebuying restrictions to be extended

By Wang Qian (China Daily)
Updated: 2011-01-24 06:53

BEIJING - The central government will expand property-purchasing limitations to second- and third-tier cities as it steps up efforts to cool the real estate market, a report said on Sunday.

Authorities have drafted a list of cities to which the purchasing limit will apply, the Chongqing Evening News quoted an unnamed vice-ministerial-level official with the Ministry of Housing and Urban-Rural Development as saying.

The list will include Qingdao city in East China's Shandong province, and several cities in Northwest China's Shaanxi province and South China's Guangxi Zhuang autonomous region, the report said.

If the listed cities' leaders fail to implement the limits, they will be invited to have a "face-to-face chat" with the ministry, the report said.

Beijing became the first city to adopt the limits in April 2010. They took effect in May. The rules forbid local families from buying more than one apartment in the capital.

Other big cities followed suit. These include Shanghai; Tianjin municipality; Guangdong province's Shenzhen city; Zhejiang's provincial capital Hangzhou and Ningbo city; Jiangsu's provincial capital Nanjing; and Fujian's provincial capital Fuzhou and Xiamen city.

Shandong's provincial capital Jinan became the latest city to join the list on Friday.

From Friday until Dec 31, 2011, every Jinan family can buy only one new downtown commercial property, a notice released by the local government said.

Experts said the expanded limits are intended to cool overheating housing prices in second- and third-tier cities.

From last January until last November, Shaanxi's provincial capital Xi'an invested more than 76 billion yuan ($11 billion) in real estate, a 22.2-percent year-on-year increase. Sanya city in South China's Hainan province invested about 12 billion yuan, a 35-percent increase over the same period of 2009, Shanghai Centaline Property Agency Ltd figures showed.

Sanya's housing prices were the most rapidly growing among all major cities in the first 11 months in 2010. The average price in the city grew by about 50 percent year-on-year, National Bureau of Statistics figures showed.

By the end of November, big real estate developers had reserved about 2.44 trillion square meters in second- and third-tier cities, indicating booming investment enthusiasm, according to figures from Shanghai Centaline Property Agency Ltd.

The Ministry of Land and Resources also reported in early January that the country's land transfer revenue soared by 70.4 percent year-on-year to 2.7 trillion yuan in 2010.

Huayuan Real Estate Chairman Ren Zhiqiang said in his latest blog on Thursday that real estate investment has gradually shifted from the country's eastern region to the central and western regions, and from big cities to second- and third-tier ones.

Centaline Property analysts said housing prices in several cities will increase 10 percent to 20 percent compared to 2010 levels. These include Henan's provincial capital Zhengzhou; Hunan's provincial capital Changsha; Sichuan's provincial capital Chengdu; Hebei's provincial capital Shijiazhuang; and Guizhou's provincial capital Guiyang.

Many local governments will also pilot property taxes to cool the market and reduce the local economies' over-reliance on land transfers.

Chongqing and Shanghai are among the first to implement the tax trials. Chongqing Mayor Huang Qifan said early this month the municipality planned to impose a property tax on high-end housing.

Shanghai is likely to introduce a tax on new homes with a per-capita floor space of more than 70 sq m in the first quarter of the year. The tax rate is expected to be 0.5 percent to 0.6 percent, Xinhua News Agency reported on Jan 15.

Insiders said Shenzhen will likely become the third city to levy the property tax, Chongqing Evening News reported on Sunday.

China Daily

(China Daily 01/24/2011 page3)