China's housing prices likely stable this year: expert

06:59, March 22, 2010      

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Housing prices in China are likely to be stable in 2010 and the number of houses to be sold will drop, an expert said at a real estate session of Boao International Tourism Forum on Saturday.

"In 2010, housing prices will be stable in general, and I believe that fewer housing units will be sold compared with last year," said Zhu Zhongyi, vice chairman of the China Real Estate Association.

The government earlier this week ordered 78 central state-owned enterprises to quit real estate business as their land acquisitions are blamed for fuelling rise of urban housing prices, which Zhu said is a signal to curb rises in housing prices.

But Zhu remained cautious on housing prices in metropolises like Beijing and Shanghai.

"It is hard to tell. We still have to wait and see," he said.

To curb the soaring prices is a very difficult task given the lack of property tax and local governments' reliance on land leasing for revenues, said Chi Fulin, head of Hainan-based China Institute for Reform and Development.

Housing demand will keep on rising in China in the coming years. China's urbanization rate will reach 55 to 60 percent from the current 41.8 percent by 2020, and each percentage point means 10 million new urban residents, who are in need of homes in cities, Chi said.

"The demand for affordable housing will be rising, and the government should shoulder the responsibility," Chi added.

China's central and local governments rolled out a series of measures to dampen the overheated property market at the end of last year, including reimposing a sales tax on homes sold within five years of their purchase and raising the down payment requirement for families buying a second house or more with bank loans.

In another move to cool the property market, the People's Bank of China, the central bank, raised the deposit reserve requirement ratio in January, and in February for the second time.

The government also promised to build 3 million housing units with affordable prices this year.

Source: Xinhua
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