Shanghai apartments

To An Wei, a white-collar migrant worker in Shanghai, China’s tax exemption on house purchase and mortgage deposits reduction are a real stimulus for home buying.

The newly-wed IT worker said, ‘The new policy would not only save me more than RMB4,400 ($644) from the tax reduction in purchasing a 90-square-meter flat in Shanghai and make it earlier to obtain a bank loan to pay for the mortgage, but also give me confidence in the stability of the housing market.’

The Ministry of Finance, the State Administration of Taxation and the People’s Bank of China, the country’s central bank, made the synchronous move on Wednesday to announce a series of new measures to boost the domestic real estate market, which had shown signs of slowing amid the global financial turmoil.

‘The policy is concentrated on tax reduction and relaxing restrictions on financial institutes to give loans to private homebuyers,’ said Nie Meisheng, the Chamber of Real Estate of the All-China Federation of Industry and Commerce director.

The chamber was one of the advisors prompting the promulgation of the policy.

The Ministry of Finance announced on Wednesday to exempt the stamp tax on property purchase and the value-added tax of land on property sales, starting from Nov. 1, to boost the slowing real estate sector.

More HERE.
Source: China View

An estate broker enthusiastically introduces apartments for sales to a potential home buyer at a housing exhibition in Huangshan City, central China

During the National Day holiday, property transactions hit a record low of 72% down year-on-year, in Beijing, which is usually the busiest time for housing sales. This is the worst period so far this year.

Liu Feng, a business director with Career International, one of the leading recruitment and consulting companies in China, says property agencies are the worst hit during downward housing sales as most of real estate developers give their apartments to agencies to sell.

It’s estimated that almost 800 branches of various property agencies were closed in Beijing, and half of the locations and agents were slashed in Shanghai since the fourth quarter of last year.

Manager Chen Min predicts it will need one or two years for the housing market to come stable and develop again.
Source:  China Daily

Zhou Xiaochuan

Zhou Xiaochuan, governor of China’s central bank, hinted at a possible stimulus package to cushion the impact of the global financial crisis on the economy.

Although he believes investment and consumption are proving resilient, Zhou told a Hong Kong television station that it may be necessary ‘to increase domestic demand further.’ Whilst not spefically addressing property the flow-on effect is obvious and needed.

The government has already cut interest rates twice in recent weeks.

China’s third-quarter economic data, due for release on Monday, are expected to show that GDP growth dropped below 10% from 10.1% in the second quarter and 11.9% for 2007 as a whole.

Source: Reuters

The problems of housing prices

For four days, the Chinese Communist Party elite has been meeting behind closed doors in Beijing to thrash out what new policies should govern the fastest-growing economy in the world, and how to prevent the global financial crisis from damaging China’s continued prosperity as much as that of the West.

The meeting is taking place just as ominous signs are emerging that the financial meltdown in the US is having an impact on China.

The property boom of the last few years has come to an abrupt halt.

High prices and a surplus of new homes meant that in September, traditionally the best month for house sales, there were the lowest number of transactions so far this year.

Developers in the worst-hit cities, Beijing, Shanghai and Shenzhen, have been slashing prices by up to 30% in an effort to attract buyers.

‘I think house prices will fall by another 10 to 15% by the end of the year,’ said Yang Shaofeng, the general manager of the Beijing Lianda Sifang Real Estate Co and the author of one of China’s most widely-read property blogs.

‘Since 2006 a lot of money has gone into the housing market and the stock market, and that’s created a bubble. Now, the bubble is bursting.’

Read the full, detailed, depressing and biased report HERE.
Source: Daily Telegraph

Jones Lang LaSalle

Jones Lang LaSalle Head of Research (Asia Pacific) Dr. Jane Murray said in the report Asia Pacific Property Digest Second Quarter 2008, that ‘The Asia Pacific property markets are entering a correction phase that will continue over the next 12 months at least.’

Jane Murray, however, noted that in contrast to previous cycles, the extent of the downturn is expected to be moderate in most markets in Asia Pacific given the underlying sound fundamentals.

She  pointed out that potential oversupply is becoming an issue in some parts of the region, notably tier I cities in China.

The Jones Lang LaSalle report highlighted that the retail sector has continued to perform well over the first half of the year, with Hong Kong and Shanghai posting the highest rental growth in the region.

However, it said that emergence of more difficult trading conditions, coupled with new supply coming on line in number of markets is likely to result in more moderate rental growth going forward.
Source: Trading Markets