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After being interviewed by the Ministry of Housing and Construction, the regulation and control of value-added tax in Chengdu property market was adjusted to 5 years.
Sep 15,2020 09:52CST
The content below was translated by Tencent automatically for reference.

SMM: on September 14, the Chengdu Municipal Government issued the notice of the General Office of the Chengdu Municipal people's Government on maintaining the stable and healthy development of our city's real estate market (hereinafter referred to as "the notice"). The notice has a total of 15 articles, covering six aspects: strengthening the regulation and control of the land market, implementing prudent financial management, supporting reasonable demand for self-occupation, improving housing regulation and control policies, strengthening market supervision and monitoring, and strengthening publicity and guidance of public opinion.

"although the new policy on the property market in Chengdu involves many aspects, judging from the policies announced so far, we have not seen any very stringent measures for the time being. Compared with Changzhou and other cities that have just introduced property market regulation and control policies, the strength of the new policy in Chengdu is not big. " Yang Kewei, deputy general manager of Kerry Research Center, told the Financial Associated Press.

On September 11, Changzhou issued relatively stringent regulation and control measures, not only raising the proportion of down payment for the purchase of second homes to 60%, but also increasing the restriction on the sale of newly purchased commercial housing in the urban area for four years. On September 6, Shenyang upgraded the regulation and control of the property market, raising the down payment of second homes to 50%.

It is worth mentioning that all the above-mentioned cities attended the relevant meetings of the Ministry of Housing and Construction not long ago. On August 26, the Ministry of Housing and Construction convened the relevant responsible persons of the housing departments of Yinchuan, Shenyang, Changchun, Chengdu, Tangshan and Changzhou to hold a real estate work conference in Beijing, stressing the need to unswervingly adhere to the positioning of "houses are for living, not for speculation," to ensure the realization of stable land prices, stable housing prices, and stable expectations.

Ding Zuyu, chief executive of Yiju China, pointed out that the typical feature of these cities is that among the 70 cities announced by the National Bureau of Statistics, they have repeatedly ranked among the top 10 month-on-month increases in the prices of new and second-hand houses across the country.

After the Ministry of Housing and Construction convened a meeting in some cities, the industry had a strong expectation for these cities to upgrade the regulation and control of the property market.

In the new policy on the property market in Chengdu, in terms of the land market, the notice said that it will increase the supply of residential land, with residential land accounting for not less than 60% of the operating land, and areas with tight supply and demand not less than 70%. Priority will be given to ensuring the supply of indemnificatory housing land; Chengdu will comprehensively clean up the situation of undeveloped land and announce to the public, strengthen the promotion of undeveloped land and crack down on land-covering and land-covering activities.

With regard to housing regulation and control, Chengdu has made it clear in its latest policy that it will increase the proportion of priority for households with no houses in the notarization lottery, and the minimum proportion of priority for households with no houses will be raised from 10% to 20%. The lowest proportion of households without houses will be increased from 50% of the remaining housing sources successively to 60%.

In terms of taxation, Chengdu will adjust the number of years of value-added tax exemption for individual housing transfers from 2 years to 5 years, in order to curb speculation in real estate.

Lu Wenxi, senior research manager of Central Plains Real Estate, pointed out that the industry has been concerned about the regulation of Chengdu before, because how Chengdu regulates the property market may become one of the examples for other hot cities to emulate.

"it may be worried that excessive regulation will put too much pressure on the market, so Chengdu has not issued a very strict policy, but focuses more on the supply of new housing, first tilting to rigid demand, and then considering just changing demand." Lu Wenxi said.

Monitoring data from the Central finger Institute show that in August this year, new housing in Chengdu increased by 11.83% compared with the same period last year. In addition, there are obvious signs of warming up in the land market in Chengdu recently.

Take Gaoxinnan District of Chengdu as an example, in early July this year, Yutai Real Estate and a number of real estate enterprises sold a piece of land at a price of 1.156 billion yuan after 60 rounds of competition, with a premium rate as high as 39.86%. The floor price of the site is 20700 yuan per square meter, making it the king of regional unit price. And the price of second-hand housing around the land is about 16000-23000 yuan / square meter.

"House prices in Chengdu have risen rapidly this year, and without intervention, house prices may continue to rise, but it is difficult to regulate and control them on the basis of existing policies." Lu Wenxi said.

Xia Yifeng, chief analyst of real estate industry at founder Securities, pointed out that looking at several cities that have upgraded the regulation of the property market recently, there is often a strong interaction between new housing, second-hand housing market and land market.

"after the rise in local housing prices driven by new or second-hand housing, it has raised the investment expectations of real estate enterprises, and developers have increased their efforts to acquire land because they are optimistic about the future. The intensification of competition in the land market often leads to higher land prices and even the refresh of land floor prices, thus deepening the bullish expectations of property buyers in the future. Stabilizing land prices is crucial to stabilizing market expectations. " Xia Yifeng said.

Zhang Bo, chief analyst of Anju Guest Room property Research Institute, pointed out that the rise in land prices in some cities is not only related to the endowment of the land itself, but also to the overall expectations of the local market. Next, some cities may make new attempts to stabilize land prices.

"many cities have come up with well-positioned plots, so some hot cities have auctioned land kings this year. If housing companies are too optimistic about the future, they tend to increase leverage in the short term. This change in expectations may lead to the continuous accumulation of risks, which should be vigilant. The management of expectations is a very important aspect of regulation and control policy. " Zhang Bo told reporters.

Xia Yifeng believes that due to the recent tight wind in the national market, many people may not notice the differentiation between different cities. While the property market in some hot cities shows obvious signs of overheating and speculative demand should be curbed in time, some economically underdeveloped third-and fourth-tier cities are still in the process of recovery. "these cities, which are in the process of repairing, might have been prepared to introduce measures to encourage the demand for self-occupation to continue to repair the market, but they had to slow down as the overall wind direction of the property market regulation changed."

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