Pre-owned home deals slump by 70% in Beijing

Pre-owned home transactions in Beijing tumbled by almost 70 percent in the first week after the municipal government announced detailed measures to cool the property market, industry statistics showed on Monday.

"Most buyers and sellers have adopted a wait-and-see attitude after the local government announced its property rules, leading to a drop in property transactions," said Hu Jinghui, the vice-president of 5i5j Real Estate.

"Very few sellers have cut prices to seal a deal."

Data from 5i5j showed that registrations by potential buyers and sellers at the brokerage firm dropped around 10 percent during the week from March 31 to April 5, while the total number of transactions of pre-owned homed fell 68 percent on the previous week.

The authorities in Beijing said on March 30 it would strictly implement a 20 percent capital gains tax on property sales, if a homeowner sells a property within five years of its purchase and the apartment is not the only one owned by a family.

Single adults with a Beijing hukou - their registered permanent residence - are now allowed to buy only one apartment, as opposed to two previously.

And the government will also not grant sales licenses to projects priced "much higher" than the average rate in the region.

All the measures went into effect on March 31.

Beijing's regulations are believed to be the most rigorous of the cities that have launched detailed rules following the introduction of the State Council's measures to cool the sizzling real estate market.