Latest News:  

English>>Business

Latest government curbs hammer property stocks

By Wu Yiyao in Shanghai (China Daily)

08:44, March 05, 2013

An investor at a brokerage in Hangzhou, Zhejiang province. The Shanghai Composite Index fell 3.65 percent on Monday to close at 2,273.40 points. Long Wei / For China Daily

More than 50 listed Chinese real estate developers hit their 10 percent daily share fall limits on Monday, with the CSI300 index experiencing its worst day in 28 months, amid worries over the effects of further government moves to curb housing prices.

The Shanghai Composite Index fell nearly 3.7 percent to 2273.40, the biggest one-day drop since August 2011.

Included in the list of falls was China Vanke Co, the nation's largest property developer, which saw its shares drop 10 percent to close at 10.84 yuan ($1.70).

The CSI300, which represents the nation's biggest companies listed on the Shanghai and Shenzhen stock exchanges, dived to 2,545.7, or 4.6 percent, the largest single-day decline since November 2010.

The State Council announced on Friday that cities should work to maintain a stable property market, with measures including ordering individuals selling properties to pay a 20 percent tax on sale profits as well as raising down payment requirements and interest rates on second-home mortgages.




In many cities, the current tax on individuals selling properties is 1 percent of the selling price.

"The curbs on the property market may easily extend its impact to other sectors, such as banking, machinery manufacturing and cement makers," said Chen Lei, analyst with Citic Securities Co Ltd.

Share prices of Anhui Conch Cement Co Ltd and Sany Heavy Industry Co Ltd dropped more than 8 percent.

Measures to curb excessive growth of home prices in several cities have cast similar shadows over property developers since late February, but declines in the market are expected to worsen as a result of the latest announcement, said Chen.

Vanessa Chan, a Hong Kong-based property analyst, said central government regulation and control over the property market will curb speculation, but the big players will not be affected in the long run if their product lines focus on areas of highest demand.

"We do not expect regulation and controls to be drastic - in the long run changes will be gradual," said Chan.

Analysts said property tax and limits on house purchases may be introduced to more cities and drag down sales of homes.

It is highly possible that in major cities sales of homes will drop in the near future, according to a research report by Orient Securities Co Ltd.

We recommend:

IKEA: Meatballs in China supplied by Fujian factory

Jet-set life takes off for country's super-rich

Taking a bite out of the market for snakes

Ratings agency warns about rising debt

Holiday firework sales fail to boom

4G network to lead the world

Email|Print|Comments(Editor:LiangJun、Li Zhenyu)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. Aviation regiment of South Sea Fleet conducts flight training

  2. Operation conducted to expel drug traffickers

  3. Pro, anti-Hugo Chavez demonstrators protest

  4. Quake hits China's Yunnan, 30 injured

  5. Beautiful journalist reporting CPPCC

  6. Two sessions: Journalists on mission

  7. Happy Boy Jaki Tan Jiexi

  8. Luoyang: Resting place of tranquility

  9. China's jumbo jet C919 expected to fly 2014

  10. China builds on border trade

Most Popular

Opinions

  1. Spoiled brats spring from pampering parents
  2. A smile can succeed where a scowl fails
  3. Reducing income inequality an urgent task
  4. Why media turns attention to 'two sessions'
  5. New glories for China in striving for nat'l renewal
  6. Home is where the heart is
  7. Are US, N. Korea playing 'basketball diplomacy'?
  8. Who will attend China's upcoming 'two sessions'?
  9. CPC adopts list of state leadership candidates
  10. Quality vocational education

What’s happening in China

The millionaire philanthropist promotes 'Clean Plate Campaign' at CPPCC session.

  1. Explosion injures over 20 in Shenyang | Pictures
  2. Wellington College Shanghai to open soon
  3. China increases nat'l basic education funds
  4. Gold speculation scams on the rise
  5. HK sets baby formula limits