Xinhua recently reported that the State Council announced a new five-point regulation of the real estate market. The announcement caused a sharp drop in housing stocks and triggered the largest slide in the Shanghai Stock Exchange in 15 months. After the second half of last year, the housing market enjoyed a rebound. In January, real estate prices increased in over one hundred main Chinese cities. With this development, the new regulation was designed to apply more control to the market and cool down housing prices. The key point of the new regulation is to expand the real estate tax on high end properties in order to constrain speculation-oriented investments. Many people believe there is a high probability that the State Council will come up with more restrictions in the future.
Source Xinhua, February 22, 2013