People go boating Saturday on a lake in Poyang county, East China's Jiangxi Province, with a new housing project in the background. Photo: CFP
Home prices in major Chinese cities continued to hit record highs in October, according to official data released Monday, despite the government's efforts over the last four years to cool the overheated property market.
The data was released by the National Bureau of Statistics (NBS), three days after the Communist Party of China (CPC) announced new reform plans aimed at allowing the property market to operate in a more stable and healthy way.
Among the 70 major cities included in the data, only Wenzhou, a city in East China's Zhejiang Province, witnessed a slight year-on-year decline of 1.5 percent in the price of newly built apartments, excluding affordable housing, in October. The other 69 cities saw rises, with prices in Shanghai increasing by 21.4 percent, the highest.
Given the rising prices, the media and public had been expecting some direct measures to cool the market following the Third Plenary Session of the 18th CPC Central Committee, detailed plans from which were released Friday.
However, the plans did not include direct administrative measures to suppress home prices, with the focus on long-term strategies instead, which analysts said could allow the market to operate in a healthier way.
"The reform plans indicate the new administration of the central government will focus on the root issues in the property market, such as high land prices and limited land supplies, rather than merely suppressing home prices via administrative measures such as limiting purchases," Fan Xiaochong, vice president of Sunshine 100 Real Estate Group, told the Global Times Monday.
The reform plans revealed that China will speed up legislation for tax collection in the real estate sector, a move that will cover all types of taxes in the industry, "especially the long-expected property tax," Jia Kang, director of the Research Institute for Fiscal Science with the Ministry of Finance, told the Global Times Sunday.
With regard to property tax legislation, analysts said it was a measure that could wean local governments away from their excessive reliance on revenue from land sales, which has been a factor behind the record-high land prices.
"Speculative buying of properties by home buyers could also be discouraged [by the property tax]," Fan noted.
The reform plans also permitted land in cities and the countryside that can be used for construction to be pooled into one market, which could allow rural collective land to enter the market and increase land supply, said Fan.
"All the plans indicate that the market will play a bigger role in allocating resources, which will be good for the property industry in the long term," Ge Ling, research director at Centaline China Real Estate Research Institute, told the Global Times Monday.
The local authorities in Guangzhou, South China's Guangdong Province also announced new policies to cool the property market Monday.
Local residents without a Guangzhou hukou (local residence permit) will be required to submit details of tax payments or social insurance payment certificates for the previous three years to be able to buy a home in the city. Previously, details of payments for the previous year were sufficient.
The local government of Guangzhou also said it would raise down payments for people buying a second home.
Shanghai released similar new policies on November 8.