The latest government measures to reverse rising property prices are chilling speculation in Shanghai, while prospective homebuyers are waiting for the rules to take effect.

In Shimao Riviera Garden Shanghai, a high-end residential development that has attracted well-heeled buyers from across the region, an owner is offering his apartment for up to 10 percent less than the average market price. The owner, who also owns six other apartments, is offering discounts ranging from 5 percent to 10 percent on all the properties.

Chen Xi, a property agent with Shanghai Deovolente Realty said the owner is obviously a speculator who, like many others, had bet that property prices in Shanghai had only one way to go - up. But government resolve to lower prices must have caught him by surprise, forcing him to dump his holdings in a hurry before the government's market-cooling measures are fully felt, Chen said.

But the discounts this owner offered still seemed too small to lure buyers. "We got lots of inquiries, but no deal," Chen said.

Indeed, the government measures stemming from the policy of keeping property price increases below GDP growth is being felt not only in Shanghai, but in property markets in all other major cities as well.

The Shanghai municipal government declared on Saturday that it will resolutely implement the market-cooling measures, including the levy of a 20 percent real-estate capital-gains tax on transactions in the secondary market except for those that qualify for an exemption. These include properties owned for more than five years and those that are owned by people who have no other real estate holdings.

Since then, the market has been rife with speculation that the sellers will pass the tax onto the buyers, resulting in an increase in the final price. But property agents said such worries seem groundless unless there is going to be a drastic tightening in supply.

"I don't see that happening," said Zhou Juanjuan, a sales manager at Familiar Realty Xintiandi Branch in downtown Shanghai.

"There is so far no price increase. Everybody, except, perhaps, the heavily indebted speculators, are adopting a wait-and-see attitude," she said.

"Of course, some house owners may use the tax as an excuse to raise prices to make more money. But I don't think buyers will be willing to pay the extra money," Zhou said.

Zhou added that the average price for a secondhand apartment in the exclusive Xintiandi area ranges from 33,000 yuan ($5,320) per square meter to 50,000 yuan per sq m.

Luo Yinshen, a Shanghai regional analyst with Century 21 China Real Estate, said that government measures have stirred great interest and expectations among potential sellers and buyers. Last weekend, after the new policies were announced, the number of people calling for information on prices was double that of the previous weekend.

Contact the writers at wang_ying@chinadaily.com.cn and shijing@chinadaily.com.cn

(China Daily 04/03/2013 page13)