| Can property tax ease the high housing prices? | |
|---|---|
| Jan 29, 2011 01:44 |   |
 | Voting without time limit Note: Guest voter(s) are not displayed here. Shanghai will charge 0.6 per cent on second homes. Chongqing will charge a tax of 0.5 per cent of the property value for houses between two and three times the market average, and 1 per cent for properties more than three times the average. Will this policy take effect as expected? |
| Jan 30, 2011 03:03 | #1 |
| It's good that the government makes policies to control the housing prices. But I am afraid that the tenants will pay the tax for the house owners. Possibly, the rent will increase. In the near future, a policy might be issued to control the increasing rents. |
| Jan 30, 2011 03:51 | #2 |
| I think Kevin is right, it may only cayse increasing rents. I would say China is still far away from the real housing market bubble, but when the bubble explodes, we all around the world are again in deep trouble. The only way to prevent the housing market problem is to increase saving, to demand that people who buy house must save a significant part of house price before can have loan from bank. I have understood that in China is very common to loan from relatives, so the percent of own money should be big, perhaps 50 - 60%. I know it is not very nice thing but it would prevent housing prices to increase. Carlos |
| Feb 1, 2011 20:42 | #3 |
| The use of the term ‘Bubble ’is to presume that the housing market in China is driven by a free market. It isn’t. You cannot buy freehold. At the best you can purchase a 70 year lease. No one can tell me what happens after the 70 years is up. No one that I know has been able to explain how the land is allocated to Developers and at what price. The cost of construction does not relate to the prices that apartments are sold. Developers will not give a discount. It was revealed last year by an electricity company that 70 million electric meters fitted in new apartments remained idle. That effectually means that 70 million apartments sold in the major cities in China remain vacant. That equates to more than the combined population of Australia, New Zeeland and Finland. You will receive a negative return on your money in a savings account when you factor in inflation. In short I believe that housing prices are tightly controlled by the central government to suck back in the vast amounts of baksheesh that is floating around. Add the millions of workers that are employed in this industry, not just in the construction but in ongoing employment, and I see no chance of this ‘Bubble’ bursting soon. Dodger. |
| Feb 2, 2011 08:40 | #4 |
| Thanks for the lecture, Dodger. Always can learn something new when grow older. Anyway, we are planning to buy an apartment from Nanning within 2-3 years and my lao po wants to hurry it just because of quick increasing prices. Only it is not easy to predict anything because the economy of China is so controlled and yuen is artifically held low. Not that the free markets would be much easier... Carlos |
| Feb 2, 2011 20:53 | #5 |
| Carlos, I didn’t mean my post to sound like a lecture, sorry. For what it’s worth I think your wife is correct; long term, this housing market will continue to climb as this is a major money spinner for local governments as well as the central government, not just in cash but also as a job creation scheme. Dodger. |
| Feb 2, 2011 22:45 | #6 |
| Dodger, While I agree entirely with your diagnosis of the problem, I disagree with your prognosis. All artificial financial schemes collapse eventually, even the 50 year long American credit bubble finally burst. Bubbles can be created in both free and controlled markets as seen just before the demise of the USSR. Currently the US is doing it's best to export inflation to China by devaluing it's own currency. In effect it's also devaluing it's international debt. The intention is to force China to revalue their currency and reduce competivness. The unintended consequence is to inject far too much liquidity into the property and commodity speculators pockets. You can see the results of that in Tunisia and Egypt where oil and food prices have skyrocketed and brought about revolution. China can never allow that so they must attack all inflation with a vengence. I don't see a crash if China acquiesces and revalues but I doubt that will happen. Nor can I see America surrending it's preeminent economic position. The great economoic battle to the death continues. Americas economy is roughly 3 tmies that of Chinas. The outcome is assured. I give it another year at most. Bob |
Last edited by BOBERT: Feb 2, 2011 23:09 |
| Feb 3, 2011 04:13 | #7 |
| Bob, I was wondering how long it would take you to post in regards to this topic. The recent problems in Egypt, Tunisia and other countries in that region are not getting too much airplay in this part of the world; possibly too many parallels, and possibly underline some of the governments deepest nightmares. China does have inflational issues which have affected me personally; the price of beer has just been increased, and wages are being tightly controlled. Apart from increasing the basic minimum wage in Beijing to 1500 RMB a month, everything else has been capped. The vocal minority is looking for somewhere safe (safe from inflation) to put their hard earned baksheesh and the housing market is about the only place. Rental returns on investment properties just don’t add up; neither do rental rates for commercial properties. We may in fact be looking at the greatest ponzey (spelling?) scheme ever created, and when you factor in the size, and potential growth of the economy, this could go on for many many years. The latest state visit was, in my opinion something of a double edged sword, and cleverly played by the Septics. The RMB has been slowly appreciating, albeit quietly. Greg Sheridan wrote a very interesting piece in the Australian the other day, which I now can’t find. In it he talks about a couple of counties in the Pacific region and their potential growth. If you can find it please flick me a copy. Dodger. |
| Feb 3, 2011 13:58 | #8 |
| Dodger, you have enunciated my views perfectly. The only disgreement we have is the timing. However as you say, considering the size and deep entrenchment of the Chinese ponzi scheme you could well be right. I have sent you a copy of the article you were looking for by email just in case this web address gets "lost in translation"; http://www.theaustralian.com.au/ Incidentaly Egypt is now teetering on the brink of civil war thanks largely to the export of US inflation. The poor in Egypt can no longer afford food or energy and that's whats prempted civil unrest. The next countries in line are Jordan, Libya, Sudan, Syria, Pakistan and a certain large country that lies in the "middle"? |
| Feb 3, 2011 18:57 | #9 |
| Quote:Originally Posted by DODGER The vocal minority is looking for somewhere safe (safe from inflation) to put their hard earned baksheesh and the housing market is about the only place.Dodger. China has imported five times as much gold in the past 10 months as compared to the entire previous year. During the same period gold has gone from US$1050 to US$1350. Gold is the traditional hedge bet against inflation. As Inspector Who would say...this present two possibilities. One...somebody in China believes inflation is headed far higher as fiat paper currencies are artificially and intentionally devalued..or two... Somebody in China believes property, the conventional Chinese safe haven will not keep pace or perhaps even decline. |
Last edited by BOBERT: Feb 3, 2011 19:53 |
| Feb 3, 2011 21:28 | #10 |
| Quote:Originally Posted by CARLOS Anyway, we are planning to buy an apartment from Nanning within 2-3 years and my lao po wants to hurry it just because of quick increasing prices. Only it is not easy to predict anything because the economy of China is so controlled and yuen is artifically hel... Invest in gold untill you buy your apartment. It's about the only thing that will safely keep pace with the "quantative easing" driven inflation. |
Page 1 of 3 < Previous Next > Page:
Post a Reply to: Can property tax ease the high housing prices?
Copyright © 1998-2024 All rights reserved.