In March this year, China’s State Council issued its new regulatory policy on the domestic real estate market, indicating that local governments should issue specific policies based on the State Council’s regulations. As of March 31, most cities in China have announced regulatory and control measures for the property market. However, excluding the biggest cities such as Beijing, Shanghai, Guangzhou and Shenzhen, some cities announced their policy measures with just a single sentence to the effect that growth of housing prices should be kept below local GDP growth. Analysts and ordinary citizens are complaining that this new round of regulatory measure will prove useless in curbing the excessively rapid growth of Chinese housing prices.
In the policy issued by the Beijing municipal authorities, it is clearly stated that local Beijing people who have resident permits (”hukou”) and who are single are not allowed to purchase residential properties. Even for couples buying houses, down payments will be higher than before. Moreover, if a seller does not hold on to the transacted residential property for more than five years, another 20 percent in tax will be imposed on the difference between the purchase price and the selling price.
At 11th International Steel Market and Trade Conference held lately in Guangzhou, several speakers mentioned the new regulatory policy, with some stating that this policy will exert a limited impact on the real estate market, and so steel demand from the construction industry will not be seriously affected. Considering that central and local government in China will continue to implement measures for the construction of affordable houses for low-income families and will increase land supply to ease any housing shortages, it is thought that the Chinese real estate industry will not see any significant regression in the current year. Construction is expected to account for 61.24 percent of steel consumption in China in 2013, followed by a 15.20 percent share for machinery and a 6.41 percent share for the automotive industry, according to one steel industry specialist.