Colliers rules out tough measures to cool mainland property market
Beijing is unlikely to roll out heavy-handed tightening measures to cool the property market this year because of government pledges to maintain the continuity and stability of its economic policies, according to consultancy Colliers International.
'We expect further policy adjustments will mainly target at curbing speculative activities in both property and land sales markets,' it said in a report. 'The government will be meticulous in using financial and tax measures to avoid excessive dampening of market vigour.'
The release of the research note coincided with a Shanghai Securities News report that said the mainland would probably start imposing property tax in selective cities this year.
Lee Hingyin, a director of research and advisory with Colliers, told a briefing in Shanghai yesterday that the 'property taxation policy itself is complicated', predicting that a tax of that kind would not be implemented this year.
China's overheated housing market has caught the attention of the top leaders including Premier Wen Jiabao, who said late last month that Beijing would resort to taxes and interest rates to drag down soaring prices.
According to Shanghai Uwin Real Estate Information, average housing prices in Shanghai hit 20,187 yuan (HK$22,932) per square metre last month, up 65.3 per cent from the same period a year earlier.
Easy credit fuelled wild growth of the property market in 2009 as the government was eager to engineer an economic recovery.
However, China Vanke chairman Wang Shi warned that the mainland was seeing a possible property bubble in some major cities.
Colliers predicted that the high-end housing market would remain bullish amid strong demand from wealthy individuals and Shanghai's sanguine economic outlook.
The expectation of a stronger yuan over the medium term also underpinned buying interest from overseas investors, the consulting firm said.
Colliers said demand for grade A office space in Shanghai would revive because of rising demand from foreign-funded firms whose performance improved amid the bottoming out of the global economy.
