Right to curb spec­u­la­tion in prop­erty

China Daily (Hong Kong) - - COMMENT - SHANG­HAI AND TIAN­JIN

have raised their down pay­ment re­quire­ments for home­buy­ers in an at­tempt to cool their over­heated prop­erty mar­kets. First-time home­buy­ers in Shang­hai now have to pay down pay­ments of at least 35 per­cent, while the thresh­old for their Tian­jin coun­ter­parts has reached 30 per­cent. Bei­jing News com­mented on Wed­nes­day:

The prop­erty prices in ma­jor Chi­nese cities, es­pe­cially in the mega cities, have risen far be­yond mar­ket and pol­icy expectations in re­cent years. The real es­tate prices in Bei­jing, Shang­hai, and Shen­zhen keep break­ing records with no signs of slow­ing down, and they even make it to the top 10 most ex­pen­sive cities for buy­ing prop­erty world­wide.

But the irony is that the av­er­age in­come of res­i­dents in the three Chi­nese cities lags far be­hind the av­er­age in­come in other top 10 cities, not to men­tion the poorer air qual­ity and ur­ban en­vi­ron­ment. That ex­plains why the “gov­ern­ment is step­ping up ef­forts to rein in prices”.

Un­like in the past, the lat­est ad­min­is­tra­tive ef­forts are ex­pected to im­pose harsher re­stric­tions on spec­u­la­tive home­buy­ers. Just two months ago, there were re­ports that a num­ber of Shang­hai cou­ples faked their di­vorce in the hope of by­pass­ing pur­chase lim­its to

buy a sec­ond prop­erty.

As a re­sult of the new mea­sures, the prices of new res­i­den­tial prop­erty in ma­jor cities such as Bei­jing, Tian­jin, and Shang­hai be­gan to de­cline in the sec­ond half of Oc­to­ber, ac­cord­ing to the Na­tional Bureau of Sta­tis­tics. The down­ward trend is likely to con­tinue, as the ren­minbi has con­tin­ued to de­pre­ci­ate in value against the US dol­lar since it was in­cluded in the Spe­cial Draw­ing Rights bas­ket of cur­ren­cies on Oct 1 and the A-share mar­ket has lit­tle bubble left.

That could deal a blow to the over­heated prop­erty mar­ket, be­cause over­seas in­vest­ment will shrink ac­cord­ingly es­pe­cially when the coun­try’s growth reaches a new nor­mal and be­gins to slow down. As such, the Chi­nese gov­ern­ment has ev­ery rea­son to em­ploy ad­min­is­tra­tive mea­sures to make sure the de­cline in prop­erty prices does not lead to a full eco­nomic crash.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.