Property Policy Needed in China

Changing real estate taxes and setting up long-term policy to control the property market is needed in China, according to reports of a speech by Premier Wen Jiabao. China’s new home prices rose for the first time in 10 months in June, according to SouFun Holdings, which owns China’s biggest real estate website. Mr Wen was cited as saying that property controls were at a “critical period” and that the task remained “arduous”.

He said restricting the demand of speculative property investments must be made a long-term policy. Recently, the People’s Bank of China cut interest rates twice in a month, stepping up efforts to promote mortgage growth despite discal turmoil in Europe. The central bank has indicated that property restrictions would not be relaxed any time soon. More and more observers say they expect to see the Chinese property market make a comeback.

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