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<Research>M Stanley: CN Property Purchase Tax Cut May Marginally Help Home Sales
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China's Ministry of Finance introduced a series of housing tax reduction measures yesterday (13th) to lower transaction costs for both buyers and sellers, Morgan Stanley released a research report saying. These measures were largely in line with market expectations and may provide slight support for property sales in the near term. However, while the measures may cut costs for both buyers and sellers, they are unlikely to change the cautious outlook residents have on property prices. Coupled with residents' diminished appetite for adding leverage, the broker believed that these tax incentives would modestly aid China's property sales, but they are unlikely to support a sustained recovery. The broker also viewed that developers could barely benefit from the policy since most of their projects are with teens gross margin. While CHINA OVERSEAS (00688.HK) and YUEXIU PROPERTY (00123.HK) may benefit relatively more, the broker believed that secondary agencies in Tier 1 cities might be the main beneficiaries of stronger housing upgrade demand. AAStocks Financial News |
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