Despite measures, housing prices keep rising in most cities

15:55, April 21, 2011      

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Despite the "combined influence" from multiple housing regulatory measures successively taken by the government and the interest rate hikes by the central bank, the monthly housing prices in most domestic cities were still on the rise in March.

However, a report released by the government believes that the market situation is gradually moving toward the targets of the regulatory measures. Industry insiders are mostly pessimistic about the future housing prices.

Housing prices were mostly on the rise

The statistics released by the National Bureau of Statistics on April 18 show that in March, only 12 out of 70 medium and large-sized cities experienced a month-on-month decrease in the prices for new residential housing projects, and only two cities experienced a year-on-year decrease in housing prices.

The commercial housing sales volume reached 176 million square meters in the first quarter, an increase of 15 percent from the same period of 2010. Of them, residential housing sales volume was up by 14 percent.

Meanwhile, the central government has reiterated that it will continue to control housing prices. The State Council said during an executive meeting on April 13 that housing prices in most cities are still on the rise and the government will adhere to the direction of the regulatory moves and will not ease the intensity of the regulations so as to consolidate and expand the effect of the real estate market regulations.

Furthermore, to promote the housing regulatory measures, the State Council dispatched eight teams to various cities in early April to supervise their implementation.

According to a report by the People's Daily Overseas Edition, this has been the highest-level and most resolute supervision move taken by the central government. This signifies that the central government has affected an unprecedented increase in the intensity of the real estate market regulations in local regions. On the top of the supervision, the central government will likely place more pressure on local governments in the near future, urging them to formulate tighter regulatory policies.

China's property market progressing toward projected macro-control target

Although housing prices in most cities are still rising, statistics for the first quarter showed that China's property market cooling measures are paying off. The market is progressing towards the projected macro-control target step by step, according to a Chinese government report.

Compared with February, there were six more cities that did not see month-on-month new home price increases in March, and the growth in new home prices slowed in 29 cities in March.

In addition, new home prices rose slower in 46 cities in March from a year earlier, up from 30 cities in February. According to monitoring results, land prices rose slower in the first quarter compared to both the previous quarter and the first quarter of last year. The growth rate of residential land prices dropped significantly from the first quarter of last year.

The government report noted that the encouraging changes in the monitoring statistics show that the property market is steadily progressing toward China's projected macro-control target. The people's concern over the possible housing price rebound may be eased, and if the macro-control measures continue to be effectively implemented, the country will build more social housing and capital flows to the housing market will be curbed. The macro-control measures are expected to further cool the housing market and help stabilize land prices.

Sheng Laiyun, a NBS spokesperson, recently said that according to relevant statistics for the first quarter, the macro-control measures are paying off, and the soaring trend of housing prices has been halted.

Experts also believe the effect of the regulation and controls will become more obvious in the second half of 2011. The falling tendency in housing prices has become a consensus.

In regards to housing prices released on April 18 showing changes in 70 large and medium-sized cities in March, Dong Fan, director of the Real Estate Research Center under Beijing Normal University, said that new house prices will certainly fall in the second half of 2011 because 80 percent of middle and high-income groups have lost their housing purchase conditions.

"The current round of real estate regulation and control has achieved initial success and the effect is expected to become more obvious in August 2011," Liu Xiaoguang, vice chairman and general manager of the Beijing Capital Group board, said during the "Real Estate Innovation under the Continuous Regulation and Control" sub-forum at the annual 2011 Boao Forum for Asia.

Hu Jinhui, vice president of www.5i5j.com, believes it is possible that housing prices will fall 10 to 15 percent in 2011 if the policy is well implemented.

Chen Guoqiang, vice president of the China Real Estate Society, said that if situations, such as a policy loosening, do not appear within a period of time, the decline of housing prices will come earlier in the second quarter of 2011.

Ba Shusong, deputy director of the Finance and Banking Institute under the Development Research Center of the State Council, recently also pointed out that the turning point of the property market is emerging and it is more likely that a slight price adjustment through industry consolidation will appear.

By People's Daily Online

 
 
     
 
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