Real estate: bubble or boom? -- Business -- People's Daily Online
Real estate: bubble or boom? - Special

09:22, August 07, 2009

"The government should do something to effectively control the speed of growth of the real estate market."
-- Han Zheng, Shanghai Mayor

"Economic recovery and the stimulation of domestic spending need to be driven by the real estate industry."
-- Ren Zhiqiang, Huayuan Group President

"China's real estate market has begun to recover substantially."
-- Jing Ulrich, managing director of JPMorgan Chase

"The severe downturn in China's residential real estate sector that began in late 2007 appears to be over for now."
-- Bei Fu, credit analyst at Standard & Poor's

"China's inflation pressure will not be reflected in commodity prices, but in prices of assets, especially housing prices will."
-- Xia Bin, director-general of the Institute of Finance at the Development Research Center of State Council

· Central bank: rapid growth in real estate loans in H1

New medium and long-term loans issued to the real estate industry in the first half were 1.5 times that issued to the industry for the whole of 2008.

· July housing transactions down slightly in first-tier cities
· Real estate sales up, prices soar

In Beijing's Central Business District, residential property appreciated 6.5 percent in one week alone in July. "We used to talk about monthly price growth, but recently, it's more about daily change," said a property broker.

· Real estate transactions, prices surge showing clear recovery trend
· Developers buy prime land at hefty rates to ride boom

land reserves of China's 10 major property developers jumped 74 percent month-on-month in June. A new group of "prime lands" has appeared in first-tier cities, which has led to an increase in land prices.

· Prime land in Beijing's CBD area auctioned for record 4.06 bln yuan
· Industry: no need to fear "prime land"

Developers are mainly using the "prime land" they have purchased as commercial land for comprehensive business development. There is no need for the public to fear "prime land", as long as land for guaranteed housing is ensured.

· Supply and demand, not land value decides housing prices

Supply and demand is the deciding factor for land value, while developers' expectations about future housing prices directly influence land demand, said the Ministry of Land and Resources.

· China's proportion of land value in housing price is far below UK and US
· Land prices continue to decline in the first half of 2009
· "No special curb" for foreign capital to invest in China's real estate sector
· Less investment in real estate slashes FDI
· Is inflation expectation pushing housing prices up?

In the long run, the real recovery of the real estate market rests upon two fundamental factors: the overall recovery of China’s real economy and the restoration of reasonable housing prices.

· Expert: too early to talk about inflation

In the first half of 2009, CPI fell 1.1%, PPI fell 5.9%. This shows that the current prices are still at a relatively low level. "It is too early to talk about inflation."

· Inflation expectations: coming reality or overanxiety?

Credit surge has provided ample liquidity for the real estate and stock markets, but the real economy has not recovered and the monetary circulation is still slow. "There are only expectations of inflation, which are still far from reality."

· China to strengthen affordable residential housing access management

Local governments "should continuously improve the access, examination and verification mechanism for supply targets, establish fair, impartial and open verification procedures."

· Supply of land for welfare housing increased substantially in first half of 2009

In the first half 2009, supply of land for affordable housing rose by 33.3 percent year-on-year, while the total residential land supply witnessed a 9.5 percent decline.

· China banking regulator to stick to rules on mortgage for second home

China's banking regulator said it would "unswervingly" maintain its current rules on mortgage for second-home buyers, in response to recent reports that it would tighten such rules on worries that soaring bank loans would create a real estate bubble.

· Banking regulator: ensure loans enter real economy

On July 27, China Banking Regulatory Commission vowed to tighten lending regulations on four major types of investment project including real estate.

· China to regulate real estate markets

Developers' illegal behaviors like "hoarding houses" aimed at misleading the public to push up housing prices will be prevented.

· Shanghai and Guangzhou strengthen control over real estate markets
· Real estate market policies aim to guarantee investment

"Current real estate market policies have a clear objective to guarantee investment. The adoption of a series of relaxed monetary policies and tax reduction will encourage residents to purchase property."

|About Peopledaily.com.cn | Advertise on site | Contact us | Site map | Job offer|
Copyright by people's Daily Online,all rights reserved