China Tries To Kickstart Housing Sector

In an effort to help the slowing economy, China recently reduced taxes for new homeowners; however, academics speculate consumers will wait for the prices of homes to decrease even with the new measures in place before purchasing a home. Radio Australia’s David Wang reports:

China’s Ministry of Finance announced the property contract tax to be lowered from three percent to one percent on purchases of property under 90 square meters. It also lowered down payment requirements to be decreased from 30 percent to 20 percent.

In an interview with recently married Steven Shi, Shi responds that for couples with little savings, it is still “a huge burden to buy a property” and he will wait for housing prices to drop more.

Although the policy is meant to alleviate the burden on new homeowners, a recent Internet Poll conducted by a Chinese newspaper web sited found that 67 percent of respondents said they would not by a home in the coming months saying, the “new policy basically did nothing. We are still worried about the housing price. We will buy when the prices are down. ”

Monash University (Melbourne, Australia) Economic Professor Shi He Ling feels the policy could bring some changes but the biggest problem is how quickly the prices for homes have increase in cities like Shanghai, Shengzhen, and Hangzhou in the last couple years.

To listen to all the interviews, click here.

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