chinese govt to continue curbing policies on property market
News Posted On: 19 December 2011
No retreat no surrender is the Chinese government's stance on easing up on its measures to cool the once-runaway housing market. State TV channel Xinhua has just printed snippets from a recent closed-door meeting, which said that the measures will be continued indefinitely until prices are at a "reasonable level", and that is reasonable as judged by the communist government, not reasonable by any other standard.
After the measures began to pull down prices, there had been hopes that the government would pull back on the policies, which include a ban on second home ownership, a heavily restricted mortgage market, and additional property taxes in several major cities. The latest figures show the effect of the measures intensifying across the country.
The property market saw its worst performance this year in November according to data from the National Statistics Bureau. The data shows 0.3% month on month decline in new home prices across China's four major cities (Shanghai, Beijing, Shenzhen and Guangzhou), the biggest monthly falls for these metropolitan areas this year, according to data from the statistics bureau.
Perhaps the biggest indicator of how the market has cooled is the fact that the biggest month on month rise in November was 0.2% in Guiyang in the southwest. Meanwhile the eastern port city of Ningbo and Shenyang in the north close to the North Korean border posted the biggest month-on- month declines of 0.6 percent.
With no end in sight analysts are predicting the performance will continue to worsen.
"Home prices will fall further as the government's tightening continues," said Jinsong Du, a Hong Kong-based property analyst for Credit Suisse Group AG. "We'll see more small developers file for bankruptcy or sell off their assets next year."
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Article written by Liam Bailey
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