KUALA LUMPUR, Nov 19 (Bernama) -- Bursa Malaysia gave up earlier gains to end mixed today, amid a higher regional market showing, as property, construction, and healthcare counters attracted buying interests, while plantation, banking, and telecommunication stocks saw some profit-taking, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.70 points to close at 1,602.34 from yesterday’s close of 1,604.04. The benchmark index, which opened 0.86 of-a-point lower at 1,603.18, moved between 1,601.02 and 1,608.88 during the trading session. However, the broader market was mixed to higher, with gainers leading decliners by 565 to 438 while 502 counters remained unchanged, 961 untraded, and 14 suspended. Turnover narrowed to 2.83 billion units valued at RM2.08 billion versus 2.96 billion units valued at RM2.23 billion yesterday. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark index remained range-bound and it required a dec
Key Takeaway: Shanghai becomes the first major Chinese city to introduce tax incentives aimed at rejuvenating its struggling property market, signaling a potential wave of similar policies across 'Tier One' cities.
Highlights of Shanghai's Tax Incentives
- Value-Added Tax (VAT) Exemption:
- Sellers of existing properties are exempt from VAT if they hold the property for over two years.
- Deed Tax Adjustment:
- The threshold for levying deed tax has been raised from properties over 90 square meters to those over 140 square meters.
- Example: For a 10 million yuan apartment, deed tax is reduced to a minimum of 100,000 yuan, down from 300,000 yuan.
- Elimination of "Ordinary" vs. "Non-Ordinary" Housing Taxation:
- Properties larger than 144 square meters will no longer face higher taxes.
Market Context
- Property Sector Challenges:
- The property market slump, once contributing 25% of China's economic activity, continues to weigh on growth.
- In October, resale home prices in Shanghai fell for the 16th consecutive month, down 6.7% YoY, though new home prices saw a slight MoM increase.
- Broader Measures Since September:
- Minimum down payment reduced to 15% for all housing categories.
- Relaxation of home purchase restrictions and new tax incentives for home and land transactions.
Impact and Expectations
Short-Term Gains:
- Policies have shown early success, boosting housing demand and stabilizing prices.
- Real estate and Hong Kong-listed mainland property indices traded higher on Monday following Shanghai's announcement.
Ripple Effect:
- Analysts expect other Tier One cities, including Beijing and Shenzhen, to adopt similar measures in the coming weeks.
Challenges Remain:
- Measures address immediate concerns but fall short of solving the broader confidence crisis among consumers and investors.
- Long-term solutions require addressing concerns over economic and income growth stability.
Analyst Insights
- Bruce Pang (JLL):
- The move is part of nationwide efforts to restore confidence in the housing sector. Further city-level incentives are expected soon.
- Xu Tianchen (EIU):
- Removing distinctions between "ordinary" and "non-ordinary" housing could encourage upgrades while prices remain low.
Conclusion
Shanghai’s tax incentives represent a bold step to stabilize its property market, providing a model for other cities to follow. However, policymakers must continue to build consumer confidence and address long-term economic growth to ensure sustained recovery in the real estate sector.
Comments
Post a Comment