Shanghai Daily news

Shanghai's latest effort to cool its booming property market - a 5.5 percent tax on short-term profits - is unlikely to significantly slow the spike in housing prices, according to analysts and the latest data from a major real estate index.
Because the new policy was imposed on a limited segment of the market, its influence will be narrow, said analysts including Li Zhenyu, who works for Coldwell Banker Sincere Real Estate Co.
Attempting to prevent a speculative bubble in the real estate sector, the city announced on Sunday the imposition of a 5.5 percent tax on residents who sell their apartments within the first year after purchase.
"As the housing market in Shanghai is huge, the new rules will not drag down the overall prices in the city," Li said.
The city's Website for second-hand home and apartment transactions reported that average sales prices slid slightly after the tax was announced but went on to recover.
The average sales price listed by the Shanghai Real Estate Guide fell from 9,377 yuan (US$1,133) per square meter on Friday to 8,987 yuan on Tuesday but rebounded to 9,717 yuan yesterday.
"In the current red-hot property market, some people may simply pass along any higher costs for selling their houses to the buyers," said Lina Wong, managing director of East China, Colliers International, a leading international real estate firm.
"The new policy will influence only the bargain hunters in the property market," said Wong.
By setting the one-year period, it distinguishes long-term investors from short-term speculators and even may create a healthier environment for long-term growth, Colliers said in a report.
Developers seeking to exploit Shanghai's surging market also see the new tax policy as a potential plus.
 "As a land developer, we appreciate sustainable development in the real estate market over the long run," said Fan Wei, of Shanghai Forte Land Co.
Meanwhile, Shanghai is hoping it won't suffer a repeat of what happened when Hangzhou, in neighboring Zhejiang Province, imposed a 20 percent real estate profits tax last year to curb speculation. The city eventually decided to rescind the tax after sellers simply transferred it to buyers and aggravated the runup in property market.
But the tax was removed later last year as house sellers transferred the tax to buyers, which further stimulated the housing price to go higher in the capital city of Zhejiang Province.