Back
2 Apr 2013
Forex Flash: Chinese real estate incorporates new tax mechanisms to cool – Deutsche Bank
FXstreet.com (Barcelona) - There has been a fairly constant flow of news from the Chinese real estate market over the last few days. Seven local Chinese governments including Beijing and Shanghai became the latest group of cities to implement the central government's real estate cooling measures which include a capital gains tax on secondary transactions, additional home purchase restrictions and tightening of real estate credit.
As DB's Chief China economist Jun Ma writes, of the seven cities, only Beijing made the 20% capital gains tax relatively explicit while all the other cities remained ambiguous on the implementation details. Overall, he believes that these local policies are broadly in line with expectations. Policies in a few major cities will continue to evolve depending on price trends. “For most tier 2 and 3 cities, policies and property prices will likely remain stable in his view – the cooling measures come amid data published yesterday which showed that Chinese home prices rose 1.1% MoM. in March across 100 major cities – the biggest gain in more than two years.” Notes Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.
As DB's Chief China economist Jun Ma writes, of the seven cities, only Beijing made the 20% capital gains tax relatively explicit while all the other cities remained ambiguous on the implementation details. Overall, he believes that these local policies are broadly in line with expectations. Policies in a few major cities will continue to evolve depending on price trends. “For most tier 2 and 3 cities, policies and property prices will likely remain stable in his view – the cooling measures come amid data published yesterday which showed that Chinese home prices rose 1.1% MoM. in March across 100 major cities – the biggest gain in more than two years.” Notes Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.