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Free AccessMNI: China To Lift Rental Hsg In Bid To Stabilize Property Mkt
BEIJING (MNI) - The Chinese government plans to further develop the rental
housing market next year as it looks to stabilize the overall property market
while at the same time buoying the world's second-largest economy, although
implementation of a long-awaited property tax system remains a distant goal.
At the annual Central Economic Work Conference, a three-day affair that
ended Wednesday, Chinese President Xi Jinping and Premier Li Keqiang stressed
the need to bolster the country's residential rental property market, especially
the long-term rental market, next year.
The high-profile meeting gathered senior Chinese officials to hammer out
China's economic development plan next year and is closely monitored by property
market players for signals on where the market may be headed.
It was the first time that boosting the long-term rental housing market has
been mentioned as a policy prescription at any CEWC, which analysts said
indicates that more supportive policies and programs could be created to advance
the rental market.
Yang Hongxu, a veteran property analyst and deputy head of E-house Real
Estate Research Institute, told MNI that the policy tone of the CEWC indicated
that the government's property policy and direction next year will be consistent
with the tone it has taken this year.
Development of the rental market would redirect demand away from the
housing sales market, Yang said, predicting that it would cut 20% to 30% of
property transactions in around 20 major cities.
The CEWC also addressed the need to maintain consistency and stability of
control policies within the property market while further improving the
long-term overall property system to ensure the stable and healthy development
of the sector.
"It shows that controls on the property market next year would not be
further tightened as large hotspot cities have already seen their property
markets cool," Yang said in an interview with MNI. "But if some lower-tiered
cities' markets heat up, a few tightening policies might emerge."
Yang also noted that policies could be loosened in cities whose property
markets show sluggishness.
Yi Xianrong, former director of the financial development office of the
government-backed think thank China Academy of Social Sciences, said the CEWC's
focus on boosting the rental housing sector still ensures momentum for China's
2018 growth, including support from the property sector, although controls on
the sector would continue to weigh on growth within the sector itself to some
degree.
Although the government has vowed to implement a real estate tax on
residential property as the core of an overhaul of the property tax system,
property tax reform was not mentioned during the CEWC summit, as some market
participants had expected.
Both Zhang Hongwei, director of the research department at Tospur
Consultancy, a real estate consultancy based in Shanghai, and Yan Yuejin,
director of E-House, said it is still not the right time to push property tax
reform because of the various intertwined interests involved and because it
remains a controversial topic.
Chinese Finance Minister Xiao Jie said in an article published in the
official People's Daily on Wednesday that legislation regarding a property tax
overhaul would be finished by 2019, and that by 2020 more detailed laws and
principles would also be unveiled.
Some commentators feel the article is an indication that the government has
reached a consensus on the issue, but Zhang said on a WeChat blog post that
"It's such a rush for Minister Xiao to voice his opinions on the property tax,"
indicating many headwinds still lie ahead for a property tax overhaul.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com
--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com
[TOPICS: M$A$$$,M$Q$$$,MT$$$$,MGQ$$$]
To read the full story
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.