The iShares FTSE China 25 (FXI) was down 2% in premarket trading Monday after the government unveiled new measures designed to cool property prices.
The Shanghai Stock Exchange Property Index fell more than 9% for its biggest one-day decline since 2008.
“The new cooling measures include an elevated income tax on homeowners who profit from the sale of a property. Higher interest rates and down payments will be demanded for the purchase of a second home in cities with rapidly rising real estate prices,” CNNMoney reported. “The central government also promised penalties for local governments that do not curb prices, saying that officials ‘will be held accountable’ in the event of failure.”
Guggenheim China Real Estate ETF (TAO) is down about 5% the past month.
Separately, Wang Shi, the chairman and founder of property-development company, China Vanke, in a 60 Minutes interview said there is a bubble in the Chinese housing market, MarketWatch reports.
Guggenheim China Real Estate ETF
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