China homebuying fever set to cool as curbs bite
Sales of new homes surge in March, with prices rising across the mainland, but buyers are already backing away from the market
The latest round of cooling measures this month is expected to slow down homebuying on the mainland after scorching sales in March.
In February, 66 cities recorded price gains.
Shanghai had the biggest month-on-month gain of 3.2 per cent. Year on year, prices rose 11.1 per cent in Guangzhou last month; 8.6 per cent in Beijing; and 6.4 per cent in Shanghai. Wenzhou saw the biggest drop, with prices tumbling 9.2 per cent.
Market watchers expect transactions to fall this month as soaring prices and strict enforcement of the 20 per cent capital gains tax coupled with the increase in down payment for second homes have dampened buying interest.
"But sales started to fall sharply when the so-called national five measures took effect on April 1," said Kenneth Pak Kei-yuen, a senior general manager at Midland Realty's Beijing office, referring to the new curbs.
Thirty-five cities announced additional property curbs after being directed by the central government to cool the real estate market. These curbs include strict enforcement of the capital gains tax and an increase in the down payment for second homes from 60 per cent to 70 per cent of the price.