2012-02-11

Some Chinese cities ease housing policies

China Property Stocks Surge as Wuhu Eases Curbs: Shanghai Mover
The mid-sized city in Anhui province will offer subsidies of 50 yuan ($7.90) a square meter (10.76 square feet) for the purchase of homes between 70 square meters and 90 square meters, and 150 yuan a square meter for new homes smaller than 70 square meters, the Wuhu government said in a statement on its website yesterday. The city will also waive a deed tax, it said.
I found the average price for property in Wuhu is 5567 yuan per sqm. The subsidy is worth less than 3% at most and is unlikely to have any effect except to push some marginal buyers into the market. This may even end up cannibalizing demand by bringing forward buyers who would otherwise wait for price declines: if you expect price declines of less than 3%, buy now. If you anticipate further declines, wait. Since the subsidy is ongoing, it won't have as big a cannibalizing effect as the U.S. tax credits, but I believe there could be some impact. In sum, nothing good will come from this policy.

安徽芜湖打响龙年救市第一枪 房调松绑或现跟风

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