High housing prices persist amid curbs

14:00, May 20, 2010      

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The strict measures rolled out by the Central Government to rein in soaring property prices over the past month have delayed purchases by potential buyers in most urban areas. However, high housing prices are still hanging over many major Chinese cities, domestic media reported in recent days.


In Beijing, property prices grew by 14.7 percent in April year on year, peaking in the past 10 months, while the total floor space sold dropped to less than 1.2 million square meters, about 41 percent less than in March, the China Daily cited statistics from the capital’s statistics bureau.

The average housing price inside Beijing’s fourth ring road from January to April reached 34,112 yuan (US$5,016) per square meter, it said.


In April, the price of newly built houses in Shenzhen reached 20,567 yuan per square meter, a year-on-year increase of about 67 percent, while the total area sold in the city dropped to 291,200 square meters, a year-on-year decrease of about 61 percent, statistics from the Shenzhen bureau of land and resources showed.

“Shenzhen’s property market is starting to show a downward trend with drops in both transaction and price,” a report from the city’s major realty agency Shenzhen Centaline said, according to the Shenzhen Economic Daily yesterday.

Shenzhen Centaline sold only 422 houses between April 16 and May 15, a 89.6 percent decrease compared with the 30 days prior to the implementation of the new curbing measures, while their average price dropped by 9.17 percent, the Shenzhen Economic Daily said.


Zhang Xiuhua, CEO of the Shanghai-based Fortune-Sun Reality Consultant Co. Ltd., said housing prices in Shanghai are not falling as expected and the macro-control policies have only restrained transactions, with only 71,000 square meters of real estate sold during the first week in May, about 35 percent less than the previous week.


Property prices in second- and third-tier cities are also increasing slightly, attracting speculative homebuyers to avoid the strict macro-control policies.

Chen Long, an analyst from the Wuhan Efang Research Center, said the average transaction price in the downtown area of Wuhan, capital of Hubei Province, reached 6,640 yuan per square meter from May 6 to May 12, about a 0.33 percent increase from the previous week. The number of houses sold dropped 233, about 23 percent less than those of the previous week.

Chen said most property developers are not planning to offer any discounts on housing prices and most potential homebuyers are adopting a wait-and-see attitude at the moment.


During the recent May Day holiday period, total transactions in Hangzhou, capital of Zhejiang Province, was less than 10 units, but pre-owned houses downtown hit a record 20,000 yuan per square meter in April, statistics from Centaline Group showed.

Relatively low housing prices and relatively free policies have also attracted speculative property buyers to invest in second- and third-tier cities, industry figures showed.

The Central Government should ban buyers from purchasing property outside of their place of residence, said Li Chunyu, director of the market research department with the Kunming Hefuhuihuang Real Estate Co. Ltd.

About 60 percent of respondents in a survey by the major portal sina.com said they think housing prices will fall following the government’s strict control measures, while 30 percent of those polled thought otherwise.

Electricity in a large number of houses in 660 cities had not been used for more than six months, indicating an unexpectedly high vacancy rate in the country, according to recent records from the State Grid.

Source: Shenzhen Daily


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