Chinese cities ‘mull fine-tuning property curbs’

Some local governments in China are considering measures to fine-tune property curbs and may propose these tweaks during next year’s National People’s Congress, the 21st Century Business Herald reported yesterday.

While key cities such as Beijing, Shanghai and Qingdao have decided to extend home-purchase limits and continue property-tightening measures next year, other local governments are mulling measures targeted at helping first-time homebuyer demand while maintaining an overall tight stance.

Local governments, which depend on land and property sales for tax revenue, are not keen to carry out the tightening measures because of the resulting lower revenues due to weaker land prices and housing sales. These measures include limits on home purchases, higher downpayment requirements for those buying additional homes, stricter mortgage rules and restrictions on financing for developers.

Even as the housing market began to ease, the central government said that the curbs must be maintained to bring property prices down to more reasonable levels.

Meanwhile, revised draft rules from the Ministry of Land and Resources released on Wednesday require China’s property developers to start construction on idle plots within three months of receiving a government notice or risk losing land usage rights without recourse for compensation.

The authorities are clamping down on land hoarding that has been blamed for driving up real estate prices but there were no details on when the new rule will kick in.

Source : Today – 23 Dec 2011

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