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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: prosperous who wrote (41590)	10/21/2008 1:14:23 AM
From: TobagoJack	1 Recommendation Read Replies (2) \| Respond to of 220318

Chinese government just changed its real estate credit measures to boost the property market in China. and so, let us all hold hands, across four oceans, and in all directions, in the olympic game spirit, drums beating, drummers chanting, united in one thought, "save us! for we mean to be worthy!" the con is back on, and they will do so by trashing paper money cash is just paper rubbish, and must be exchanged for stuff, maybe quote is a summary of a Deutsche Bank report: Months after the local government initiatives to support property demand, the State Council is today sending its first official signal that it will also reverse the central government's real estate policy to help stabilize the property market. In a press statement following the latest State Council meeting outlining major policies for the fourth quarter of this year, the State Council said that "real estate transaction taxes will be reduced to support demand for residential properties." While no details are given, we believe that the most important transaction taxes that are likely to be cut in the very near future include: (1) the 1.5-3.0% deed tax (or registration tax) on the property selling price; (2) the 5% business tax levied on sales of properties held for less than five years, and (3) the 20% profit tax levied on capital gains on properties held for less than five years. As we pointed out earlier, other near-term policy options include a reduction in mortgage lending rates for second homes, a cut in the down-payment ratio for second homes, and measures to ease funding constraints on real estate developers. We maintain our view that these measures should help boost market sentiment and thus offer short-term support for share prices of property companies, but their impact on the physical market will likely be limited. Specifically, we think these policies can help ease the declining trend of property sales and property prices, but are not sufficient to reverse it. At least one of the following three conditions will be needed for a genuine recovery in property demand and prices: (1) buyers for self-use properties need to see affordability returning to more reasonable levels; (2) for investors seeking rental income, rental yield(currently at 3% in most tier-one cities) needs to be comparable with lending rates (currently at 6.9%); and (3) for investors seeking investment gains, signs of a property price recovery are needed to inspire demand (which will typically require GDP recovery as a precondition, according to our 10-country study on the correlation between property price cycles and GDP cycles). None of these conditions will likely be met within a year, in our view. unquote