Home prices decline
16/5/2005 16:37
Vicky Xu / Shanghai Daily news
The new policy
imposing an extra 5 percent tax on home traders who sell properties bought
within two years has dampened the real estate market by reducing both trading
volumes and average prices, according to data recently released by
ehomeday.com.
As the biggest online used home trading hub, ehomeday.com said
it had experienced a nearly zero trading volume for downtown appartments since
the golden week holidays ended. Only some apartments located on the outskirts of
the city were still being traded. The average home trading price has dropped
approximately 3,000 yuan per square meter.
On the other hand, real estate
agencies have also reported that it has become a buyers' market. More investors
are asking agents to list and sell their apartments as soon as possible, but
fewer home buyers are making purchases. In Pudong and Changning districts, some
agencies have posted "3 Day Urgent Sale" and "Big Bargain" signs for rash home
sellers who want to receive their cash before June 1. It is rumored that the
total prices of some apartments dropped 300,000 yuan overnight.
A new rule
taxes homes sold after June 1, 2005 at 5 percent if they are sold within two
years. Therefore, overnight millionaires who sell homes immediately after
purchasing them and earn a huge margin overnight won't mushroom in Shanghai
anymore.
With speculation curbed, the real estate market is likely to return
to its normal state and a real home buyers may emerge quite
soon.
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