Shanghai: China may announce property tax measures as early as the October National Day holidays to cool home prices, China Business News has reported, citing an unidentified person.

The new tax, which will be extended to include residential property, is more likely to be implemented at the start of next year, the newspaper said.

The government currently imposes a tariff on business-use real estate and exempts individuals' residential housing. The National Day holidays take place from October 1 to 7.

China's property prices in 70 major cities rose 9.3 per cent in August from a year earlier, showing the need for the government to extend a crackdown on speculators and multiple home purchases.

Real-estate developers should price homes "reasonably" or face tougher tightening measures, China Securities Journal reported yesterday, citing Zhu Zhongyi, vice chairman of the China Real Estate Association.

Property bubble

Property prices in urban China are "too high" and "difficult to accept," according to a third-quarter survey of urban households by the People's Bank of China released September 19. The percentage of urban households that expect further house- price gains rose 7.2 percentage points from the second quarter to 36.6 per cent, the report said.

China has since April raised the down payment and interest rates on second-home mortgages and restricted the number of new homes residents can buy in some cities to avert a property bubble.

A recovery in property transactions even as price gains slow suggests policy makers will probably introduce further tightening measures, Credit Suisse Group AG analysts Jinsong Du and Ronney Cheung said earlier this month. Sales by value last month rose 15 per cent from July.

Jing Ulrich, chairwoman of China equities and commodities at JPMorgan Chase and Co., said September 8 that China doesn't need additional measures because an increasing supply of affordable housing will damp prices. BNP Paribas yesterday raised its view on the Chinese property industry to "positive" from "neutral," saying in a report that the government will probably not introduce further measures to curb the real estate market as they focus on implementing existing policies.

Decline:Home prices

New home prices in Shanghai fell 2 per cent to 19,610 yuan (Dh10,734) per square metre in the week ended September 19 from the previous week, property consultant Shanghai UWin Real Estate Information Services Co said in an emailed statement. The city's new home sales rose 9 per cent last week to 278,000 square metres, the real estate data company said.