Guangzhou secondary property prices rise 5pc as tax takes effect
The prices of some properties on Guangzhou's secondary market rose as much 5 per cent on Thursday as Beijing's cooling measures came into effect and vendors tried to pass on the resale tax to buyers.
A real estate agent said homeowners were baulking at paying the new 5.5 per cent tax on the sale price of properties owned for less than five years, a tax introduced to curb speculation.
'I estimate about 40 per cent of homes in the Guangzhou secondary market were bought less than five years ago. Owners will definitely compute the tax into the house price and make the buyer pay,' Hope Real Property agent Pan Yuhao said.
Mr Pan said the market's initial reaction was to wait and see, but he expected buyers would come back into the market very quickly.
'Guangzhou is a sellers' market this year so I foresee a shortened period of adjustment to the higher prices in the secondary market. There is a high chance that buyers will be able to accept the higher prices,' he said.
Buyers may also consider smaller flats that are expected to come on the market as part of the central government's attempts to cool the mainland's property fever.
But Mr Pan said that in Guangzhou, most buyers were owner- occupiers who would not wait long if they needed somewhere to live.
Long Bin , an analyst at property market consultancy Man Tang Hong, expected buyers to wait no more than a month provided no further harsh measures were introduced to dampen market interest.
Meng Lizhu is one buyer who was caught out. She paid an extra 40,000 yuan for her 70-square-metre apartment.
'I signed the agreement to buy a second-hand apartment in June when it will be two years old. That would have exempted me from the tax under the old policy. But two weeks later I had to pay an additional 40,000 yuan,' she said.
Ms Meng said had she not made a 30,000 yuan deposit on the apartment she would have delayed her purchase. 'But we have to endure the tax because this is the market,' she lamented.