Rising housing sales spur talk of more tightening

13:55, September 08, 2010      

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As housing sales has surged and prices skidded higher in China, analysts estimate that Beijing will be forced to take more tightening measures to control risky asset bubbles from forming.

Housing transactions in cities including Beijing and Shanghai jumped in August from July. China Vanke Co., the nation’s biggest real estate developer, said sales increased 149 percent from a year earlier. Its sales made a new monthly record of 14.9 billion yuan in August.

Real estate stocks tumbled Wednesday after a newspaper reported that the government may introduce a second round of measures to cool the marke. The government is seeking to limit the risk of asset bubbles after flooding the economy with money last year to drive a quick recovery from the financial crisis.

Extra tightening measures could include restrictions on pre-sales of apartments and curbs on the discounts banks can offer on mortgages. Officials could also accelerate programs to increase the supply of housing, more strictly enforce existing restrictions on mortgages, and again consider introducing a property tax.

The 21st Century Business Herald reported Wednesday that measures could include stopping loans to developers, compulsory lowering of home prices and a ban on third-home purchases.

In Shenzhen, housing transactions jumped 84 percent in August from July, according to Soufun Holdings Ltd. Sales rose 56 percent in Guangzhou, 31 percent in Shanghai and 23 percent in Beijing, it said. Shanghai’s new home sales rose 70 percent in August from July. New home prices in the city on average jumped 9.5 percent.

By People's Daily Online


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