Econintersect: Shanghai has instituted a property tax, effective last Thursday, January 27. It appears that the institution of the tax has had an immediate affect of real estate transactions. Some purchasers appear to be ready to delay home purchase and prices of other transactions have been masde at prioces below what had been anticipated.From the Shanghai Daily:
In an online survey about 40 percent of respondents said the levy had changed their home purchase schedules. According to property information website Soufun.com’s survey, 57 percent of respondents believed the property tax would increase the costs of buying a house. Half said the property tax rate of 0.6 percent was too high, while 17 percent said it was correct and 33 percent felt it was too low.
“The Spring Festival is usually a slack season for housing transactions and new property supply is also at a very low level,” said Song Huiyong, research director of Shanghai Centaline Property Consultants.
New housing supply also dropped by a half last week and analysts said it was uncertain whether developers would follow their original sales plans, according to the survey.
From another Shanghai Daily report:
Prices were lower than expected when three plots of residential land were auctioned in Shanghai yesterday, the first plots sold since the city’s launch of the property tax.
Two plots in the Pudong New Area sold at a house price of 4,200 yuan (US$636) and 3,700 yuan per square meter to two Shanghai-based developers. Both had previously indicated they would bid higher than 5,000 yuan per square meter.
Another plot in Baoshan District was sold to Sino-Ocean Property Holdings, a state-owned property developer, at 11,000 yuan per square meter, compared to the 20,000 yuan for nearby land previously.