New rules was announced to push down the country-wide (so-called overheated) real estate price. There are many rules. Here are some I remember:
- Down payment must be 30% or higher for apartment bigger than 90 square meters. 20% for 90 sqr. meters or smaller.
- Selling apartment within 5 years of purchase are subject to about 5% operating tax of the total apartment price.
It seems the government start to be serious about the high price of apartments. Result? I cannot predict yet.
How about reforming the stock market so people have money to invest in places other than real estate? The Chinese government loves to make rules, rules, and more (bad) rules. Serious? More like nervous.
I Think that we still very far to bring to reality the over over over priced property market in the big cities such SH, BJ, GZ etc…
a normal apt brand new, price not less of 12k per sqmt in SH, cost not over 4ksqmt ( if the developer decide to be honest on steel and cement, plumbing and safety concept, which are very rare, that why ShiMao sell over 17k per sqmt, because if they bulid them properly cost 4.5sqmt)…
today has been approved the rule to forbid any further sale of land for villa or town house… to reduce prices. Well, we all laugh when we red it. As Villa Owner i m very happy as before i can sell 24k per sqmt in PD, from tomorrow i place it on auction starting from 30k…. and seel to who pays more… sinee the new rule just increased my value
no there is no serious concept to bring property market price to reality… and as seen in other Asian country when the ball of soap will blow…. aouch…. several will cry.. several will become very poor within seconds…
sad as if really something serious is properly implemented it will not make any major damage…
Let watch people when the property market 1 day to another will be forced to down to reality… it will be a tragic comic thing..
Idea ..since who really make hell of profit are the developers (average over 200% of the investiment), why dont tax them over 50% and develop such money to clean water treatment plants, green energy source… etc to make city more humans and less gray… ?
It could be a long and wide decline of the whole market. Interest groups and investors won’t be happy. But regular working class will be cheerful…
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New rules also restrict forginers to buy shanghai properties:
1) Require one year residence
2) Only can buy one unit
Out of interest (I’m not an expert on this): Would it make sense to ask a Chinese serving as a 3rd party to buy an apartment and transfer ownership afterwards to a foreigner (let’s leave gift tax aside at this point)? Is this a practical way to circumvent the two restrictions?
In other words, do the restrictions solely affect the buying process or do they apply to ownership in general? In the way I suggested it would be possible for a foreigner to get an unlimited amounts of units of properties transferred to him, regardless of how long he’s been living in China.