Slow start for real estate market
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After a near bubble last year, the Beijing real estate market was decidedly cool at the beginning of the New Year – partly due to the expiration of a turnover tax exception. However, analysts predicted Sunday that the market would not fluctuate too much in the first half of this year.
In Beijing, only 13 previously owned homes were sold and registered Friday, the first day that the second-hand housing sales taxation policy took effect. Seventeen second-hand units were sold Saturday, according to bjfdc.bjjs.gov.cn, a government website of home transaction data.
The figures are a stark comparison to the last two days of 2009 when 1,675 second-hand homes were sold.
According to the new taxation policy, people selling home with a ownership period of less than five years must pay a sales tax of 5.5 percent. Previously, the ownership period was two years.
Although the sales number for Sunday won't be disclosed until today, 5i5j.com, a second-hand home transaction agency predicted similarly low numbers also due to the snow storm that brought Beijing to a crawl.
In Hangzhou, only 15 second-hand units were sold Friday and 22 Saturday. "It was much less than the previous year," the Morning Express, a local daily reported Sunday.
"This is just a kind of temporary fluctuation because of the the new policies, but over the long term, if the government wants to keep soaring home prices down, stronger policies are needed," Hui Jianqiang, a researcher at E-house (China) R&D Institute in Shanghai, said Sunday.
"The central government has launched a series of policies, and Shanghai also released detailed policies by the end of 2009, but I think they are just the reiteration of the old polices from the previous years," Li Zhanjun, E-house director, said, adding that he wasn't sure if fresher policies would be released the second half of 2010.
In 2003, the central government released policies "to strictly control the land supply and tighten credit." In 2005, policies to enlarge the number of low priced, and small-and medium-size homes were released. In 2006, macro control policies covering six areas including restricting foreign capital were launched. And in 2007 the regulator required buyers to pay a minimum down payment of 40 percent in an attempt to curb real estate speculation. Other measures followed in December 2009 but they haven't proven to be particularly effective.
The governments' macro control real estate policies over the past few years have not been particularly effective, "but that was normal when we were exploring the market oriented development model," said Li, adding more sophisticated policies need to be enacted.
