Researcher: Housing prices to drop in 2nd half

09:50, August 11, 2010      

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Data from China's National Bureau of Statistics showed that the trend in housing prices in 70 major cities remained generally unchanged during the last few months. However, some experts believe that the realty market will witness a decline in the remaining months of 2010 and bottom out in the first quarter of 2011.

Yang Hongxu, an expert with Shanghai E-House Real Estate Research Institute, said that some large housing developers have lowered prices of their residential housing projects.

"With growing new home supply in the second half of 2010 and the developers seeing tightening cash flow, more companies will be willing to lower prices," Yang said.

However, he predicted that the downward trend may end in the first quarter of 2011.

Since the State Council released comprehensive policies addressing fast-growing housing prices in mid-April, transactions in the realty market contracted significantly, leaving high pressure on housing developers' capital chain.

In July, housing developers' overall sources of capital totaled 515.7 billion yuan, 19.8 percent less compared with June, said Yang.

In addition, banking regulators have recently reiterated that banking institutions should limit credit to buyers of multiple homes.

"In the mid-term, as China may face inflation and balance of payments deficit, there might be further tightening policies for taxation," said Xu Feng of Midland Realty.

By People's Daily Online


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