Property sector cooling measures ineffective
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A government-backed think tank Wednesday said property market regulations launched last year were ineffective and the housing market remains in disarray.
Problems identified in the annual property sector blue book released by the Chinese Academy of Social Sciences (CASS) include: the continued hoarding of property; the delay of apartment sales in favor of flipping land for a higher price; and rising prices due to a low supply of housing, even though the government has sold significant amounts of land.
The report came after figures provided by the National Bureau of Statistics in March showed the sales price of new commercial housing in 70 medium and large-sized cities witnessed an increase of 11.7 percent year-on-year, with Haikou and Sanya in South China's Hainan Province ranking at the top, with growth of 64.8 percent and 57.5 percent, respectively.
The blue book said the effect of some policies had been the opposite of what the government intended. For example, it said the transition tax - designed to rein in gambling behavior in the property market - had simply led sellers to pass the cost on to buyers, causing even higher price hikes.
"Those control policies need to be innovated, and they also lack continuity and forward thinking," warned Li Jingguo, director of the land and property research bureau of the urban development and environmental research institute of the CASS.
Surging prices have raised government concerns about the formation of asset bubbles. In April, the State Council lifted the down payment requirement for second homes to no less than 50 percent, and fixed a minimum mortgage interest rate at 1.1 times China's benchmark lending rate.
Ba Shusong, a researcher with the State Council Development Research Center, Wednesday said the real estate sector has shifted from consumption to investment since 2005.
The commercial residential building price in 2009 increased by 23.6 percent, far higher than the growth of personal disposable income of 9.8 percent for urban households, added Li from the CASS.
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