China's real estate sector enters wait-and-see period

19:34, May 20, 2010      

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The average price for new commercial houses in 36 of China's large and medium-sized cities reached 7,975 yuan per square meter in April 2010, up nearly 4 percent from March. Meanwhile, the average price for second-hand houses reached 6,325 yuan per square meter, up more than 2 percent from March, according to a report released by the National Development and Reform Commission (NDRC) on May 19.

The report shows that in April, the lowest and highest selling prices for new commercial houses were 5,875 yuan per square meter and 13,999 yuan per square meter, up nearly 2 percent and slightly over 5 percent from last month respectively.

Property prices in 70 of China's large and medium-sized cities have risen for 14 consecutive months since March 2009. The prices rose over 1 percent in April 2010 compared to last month, close to the record high, according to the National Bureau of Statistics.

The report also shows that housing prices and sales in most Chinese cities rose sharply in the first half of April, but have stagnated since the central government released a notice on "resolutely curbing the precipitous rise of housing prices in some cities" on April 17.

The NDRC explained in the report that positive changes have occurred in real estate markets after the government's control policies drove out speculative investments. The surge in property prices in some cities has been greatly curbed, and more people have chosen wait-and-see approaches. It is estimated that housing prices may remain stable at a high level with minor fluctuations in the near future.

Most real estate insiders thought the policies have produced noticeable effects and will remain unchanged in the next two to three months. Local governments may make some minor adjustments to the policies and develop some supporting policies, but it is highly possible that the central government will not introduce any other major policies in the short term.

However, more insiders have changed their opinions and come to believe that the current control policies will probably be adjusted when the time is right. This comes after Li Wei, deputy director of the State-owned Assets Supervision and Administration Commission of the State Council, said that the monetary policies and real estate policies will be fine-tuned dynamically.

By People's Daily Online

(Editor:祁澍文)

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