July 26, 2018 / 4:32 AM / 4 months ago

China state media warns of renewed property speculation despite heavy curbs

FILE PHOTO: A Chinese flag flutters in front of a residential building under construction in Huaian, Jiangsu province, China July 12, 2018. REUTERS/Stringer/File Photo

BEIJING (Reuters) - China’s state news agency Xinhua said on Thursday signs of property speculation has re-emerged in some parts of the country and urged local governments to rein in prices more effectively.

Xinhua said about 200 property tightening rules - a record high - were introduced across the country in the first half of the year, but demand was still high in cities with relatively low property prices.

Some people also took advantage of new talent policies to qualify as ‘local’ buyers, skirting existing curbs targeted at out-of-towners.

“Local governments, as the primary party tasked to tame the market, must shoulder their responsibility as such,” the commentary said. It urged regional policymakers to improve the regulations and put an end to introducing simple “stop-gap measures”.

It said that local governments should change their economic development model and curb their thirst for land revenue.

China’s new home prices accelerated to their fastest pace in almost two years in June. The surprising resilience has highlighted market loopholes and the still-strong buyer demand after 38 straight months of price gains, even as regulators have introduced waves of tightening measures to cool the market since 2016.

It also presents a challenge for Chinese leaders seeking to contain risks in a relatively strong part of the economy as the worsening U.S.-China trade war clouds the outlook for other sectors.

Xinhua said China is moving fast to roll out a property tax, as well as complementary reforms in fiscal, land and financial areas, but gave no details.

Reporting by Yawen Chen and Ryan Woo; Editing by Shri Navaratnam

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