Elgin Area Chamber Of Commerce: China Considers Property Tax Expansion, New Home Construction Falls, Amazon To Pay Holiday Workers M

Press release from the Elgin Area Chamber of Commerce:

October 20, 2021

A woman passes through the Evergrande city during the last day of the National Day and Golden Week holidays on Oct. 7 in Wuhan, Hubei province, China. (Getty Images)
 

By Richard Lawson
CoStar News
 
China Considers Property Tax Expansion
 

China reportedly is considering expanding a property tax program nationally as the country faces a housing bubble and financially troubled developers that have hundreds of billions in debt.

China started testing the program a decade ago to rein in speculative real estate construction with property taxes on high-end homes in Shanghai on the coast and in Chongqing, a city of more than 31 million people in central China, according to a Reuters report.

President Xi Jinping has called for progress with instituting the tax legislation that would broaden property taxes across the country.

His position on property taxes came Friday when portions of Xi Jinping’s speech in August in a private Communist Party meeting were made public in a party journal named Qiushi. Those excerpts outlined the leader’s ideas for “common prosperity,” which fits into the Chinese leader's view that housing is for living, not speculation.

China Evergrande Group, one of the largest developers in the country, has some $300 billion in debt and has reportedly missed payments on bonds. Other developers have missed debt payments as well, creating the possibility that China’s economy stalls if defaults persist.

But China’s leaders have been facing opposition to the tax within the party over fears that taxes would lower property values and make people feel poorer, the Wall Street Journal reported. Up to 80% of the country’s household wealth is in real estate, and the Wall Street Journal reported that party retirees have said they can’t afford to pay the tax.
 
New Home Construction Falls
Single-family housing starts were flat in September but a decline in multifamily construction brought total starts down for the month. The Commerce Department reported that total housing starts fell 1.6% in September.

Single family is the largest segment of housing starts and showed an annual pace of 1.08 million houses started in September, the same as in August. Multifamily starts fell 5.1% from August, though, 38.2% better than a year ago.

Construction, particularly of single-family homes, has been hampered by higher materials costs as well as difficulties in hiring and obtaining building supplies.

“Policymakers should continue to work to improve supply-chains,” Chuck Fowke, chairman of the National Home Builders Association, said in a statement.
 
Amazon To Pay Holiday Workers More
Online retail giant Amazon said it plans to hire more workers this coming holiday season than last year and plans to pay them more.

The company said it will hire 150,0000 seasonal employees, starting at $18 per hour and with a sign-on bonus of $3,000. Depending on the location and shift, employees may earn $3 more per hour.

That’s about 50% more than last year, which turned out to be a stronger-than-expected holiday season.

This year, however, could prove more challenging because of supply chain delays that include clogged ports and not enough trucks because of a driver shortage.

Still, consultancy firm Deloitte projects a 7% to 9% increase in sales this year compared to 2020 with an 11% to 15% gain in e-commerce sales.

Source: CoStar Group, www.costar.com

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.