China should adopt more tax measures to rein in rising property prices, as there are limits to what credit restrictions can accomplish, an official from the country’s banking regulator was quoted as saying in the Financial News yesterday.
China could start collecting land appreciation taxes in advance and could start collecting real estate taxes in more areas where property prices are rising quickly, Mr Yan Qingmin, assistant chairman of the China Banking Regulatory Commission, was quoted as saying in the central bank-backed paper.
Among recent property tightening measures in China, the municipalities of Chongqing and Shanghai have launched trials to levy real-estate taxes on residential properties. Local governments in Beijing and Shanghai have also announced a series of restrictions on home purchases, following the State Council’s tightening measures announced in late January.
Mr Yan also said risks posed by local government financing vehicles were “controllable” as regulators recognised the problem early, the Financial News reported. The portion of total new bank lending that went to such local government platforms fell last year, he said.
New home prices in China rose 0.48 per cent last month from a month earlier, down from January’s increase of 0.95 per cent, a private data provider said this week.
The China Real Estate Index System (CREIS), affiliated with Soufun, the country’s largest online real estate firm, said on Tuesday that home prices stood at an average 8,686 yuan (S$1,676.40) per sq m in the 100 cities it covered in its survey.
Prices rose month-on-month in 80 cities, including increases of 0.52 per cent in Beijing and 0.48 per cent in Shanghai, remained flat in two cities and fell in 18 cities last month, it added.
The CREIS data is closely watched by investors who believe that it reflects property price trends better than official figures compiled by the National Bureau of Statistics.
Separately, at the opening of the annual meeting of the Chinese People’s Political Consultative Conference in Beijing yesterday, Mr Yan said. China may soon approve real estate investment trusts for affordable housing developments. He did not, however, elaborate on when the REITs will be approved.