The Chinese government needs to increase interest rates and introduce a real estate tax if it hopes to curb house prices, it has been claimed.
A conference in Shanghai was told that the market is currently in a "very big bubble" and current tightening measures are not working.
"China's property market has a very big bubble, which may last for a while. Only higher interest rates and the introduction of a property tax can bring down real-estate prices," Jiang Hui, director of StarRock Investment Mangement, confirmed.
Indeed, the latest statistics show that real estate prices across 70 major cities in China increased by 10.3 per cent over the past year.
As such, the government may consider implementing a property tax, the Xinhua News Agency has reported.
It means that property investors looking at real estate
in the country should only seek property companies that can adapt to the government's potential new policies.
Meanwhile analysts have suggested that they may want to consider properties in second and third tier cities where the market is healthier.
- Tuesday 07 September 2010