The first half of this year was eventful for China's residential property sector for several reasons, industry insiders said.
While updated rules, fresh directives, new-home price drops and worsening sentiment among homebuyers hogged the limelight, industry people kept their focus on some key phrases, buzzwords and terminology that encapsulated the market trend.
Mortgage rates up
Mortgage rates have risen considerably since the beginning of this year. In May, the average mortgage rate for first-time homebuyers reached 5.6 percent nationwide, 1.1 times the benchmark, up 18 percent year-on-year. Average interest rate for first-time mortgage applicants has been increasing for 17 consecutive months. Experts said mildly higher mortgage rates can help regulate the property market and prevent systemic financial risks.
1.8m yuan in rent
China Vanke Co, a leading residential property developer, launched Beijing's first batch of rental housing in the capital's northern outskirts in April. The two types of apartments, sized 90 square meters and 180 sq m respectively, commanded monthly rents of up to 18,000 yuan ($2,648) and 40,000 yuan respectively, far higher than 6,000 yuan for a 90-sq-m flat nearby. The longest tenure of a lease contract for this kind of home can be 10 years. So, renting a 90-sq-m flat for 10 years could set one back by 1.8 million yuan.
Talent hunt
In contrast to first-tier cities that are striving to cap their population, more than 40 cities, including provincial capitals Nanjing, Wuhan, Chengdu, Xi'an and Changsha, announced a variety of favorable policies to attract talented professionals. On the first day that Tianjin announced its pro-talent policy, 300,000 people downloaded its app to apply for resident status. Consequently, an apartment that used to sell for about 2.2 million yuan ($324,700) suddenly appreciated by 200,000 yuan to 2.4 million yuan, the China Times reported.
Registration system
In the first half, China's real estate registration system was activated nationwide for full-fledged operations, the Ministry of Natural Resources announced in June. There are 3,001 property registration offices now across the country, serving more than 300,000 enterprises and people every day, said the ministry.
Income tax
China's personal income tax threshold is expected to rise to 5,000 yuan per month from the current 3,500 yuan, according to the draft amendment of individual income tax submitted in mid-June. For the first time, housing rent will be deductible from personal tax, along with the cost of children's education and continuing education, medical fees for major diseases, interest on housing loans.
