Property cooling measures in China

Summary of new property cooling measures in China:
1. Limiting property purchase as a temporary measure in response to soaring prices and
limited supply. The Beijing municipal government introduced this rule early May 2010.

2. Stop mortgages for the purchase of a third or subsequent home and mortgages to nonlocal
residents who cannot provide more than one year of tax returns or proof of social
security payments.

3. Lift the down payment to 30% or over. Full implementation of 50% down payment and
10% interest rate premium for the purchase of a second home. No consumer lending
can be used for property purchase.

4. Adjusted the preferential treatment related to property transaction on deed tax and
personal income tax.

5. Increase housing and land supply, particularly on small-to-medium units and social
housing.

6. Strengthen the monitoring of market irregularities, such as land hoarding, change of land use and delay of construction commencement by property developers. Developers
with misconduct records are not allowed to buy land nor raise funds in both equity and capital market.

Counters tt could be affected by the new measures include Capitaland, Keppel Land, Guoco Land & Yanlord.

#Property: Shares of Spore developers with China exposure mostly down but decline in line with broad market pullback, not accompanied by heavy volume, suggesting investors not overly concerned about impact of China’s latest tightening measures. View backed by gains in shares of China-listed developers although HK developers with China ops are down.

The initiatives are not unexpected as several cities have already introduced part of the measures, including limiting purchases, increasing mortgage ceiling & banning mortgages to 3rd home buyers. However, this will continue to add pressure to market sentiment, which will impact property prices in China.