How Shanghai is Cooling the Property Market

September 27, 2006 at 10:46 pm (China, Economics, Politics)

From my CDT post

It was said that one of the purposes to oust Chen Liangyu was to cool Shanghai’s economy, particularly the real estate sector.

According to Apple Daily, echoing with central government’s tightening policy on the property market, local governments one after another released news on declining property prices.

Shanghai’s property prices, which have been at its highest for a long time, also reportedly slumped. However, those were just make-up news, specifically tailored for the demand of the central government.

Along the round road in Pudong district, prices of some new apartments were proposed as 8,000 yuan per square meter, but the real prices were over 12,000 yuan. Buyers have to cooperate with sellers to “make prices”. For example, if a buyer wants to purchase an apartment with the real price of 950,000 yuan, he can get a 20,000-yuan discount if the buyer agrees to forge a 700,000-yuan selling price on the contract, while pays 930,000 yuan in practice.

This tactic helps both the buyer and the seller reduce tax payments. More important, it makes the local government happy, because it “successfully” lowers the price of an originally 950,000-yuan apartment to 700,000 yuan.

Click here to read more (in Chinese).

Advertisements

2 Comments

  1. kate said,

    It’s really like a signal to cool down the property market in Shanghai. I hope it could really help as every ordinary chinese wishes.

  2. Autophytes said,

    a parting phrase, expression of unity (1) Autophytes praises (11) Praises to the almighty given by Rasta

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: