New home supply exceeds demand in Beijing

15:04, September 17, 2009      

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On September 16, China Index Academy (CIA) released the "Beijing real estate market analysis and forecast in August". Beijing's property transaction is likely to decline in September, while home prices were expected to hit record high again, said the report. The report also noted that Beijing's new home supply had exceeded demand for the first time.

According to statistics, the transaction of forward delivery housing in Beijing reached 1,336,300 square meters in August, down by 10.34 percent compared with the previous month, and the existing houses transaction decreased by 37.53 percent.

"Tightening the second house mortgage policy leads to the waiting circumstance for investment demand temporarily, and some of demands which need to improve the house quality will also slow down the step of entering into the property market. In addition, the increasingly high house prices will take effects on inhibiting the release of rigid demand," said, the analysts from the CIA.

It is noteworthy that the supply of Beijing's housing market soared in August, the ratio of property transaction volume to new properties approved for pre-sale fell below 1 for the first time, down to 0.80, which was the first time for property market in Beijing showed that supply exceeded demand.

Meanwhile, Beijing's average house prices in August decreased by 0.28 percent, and maintained the level of the previous month. But, if excluding the influence of protective housing, the average price of commodity housing amounted to 14,192 yuan per square meter, down by 3.12 percent compared with July. It was the first decrease on the average price of commodity housing since February. The premium rate of Beijing residential land in August appeared to decline for 1st time, reaching 52.20 percent.

However, the report thinks that the falling home prices of Beijing in August was mainly impacted by the sharp decline in average prices of some areas, which didn't mean that the whole market came into the downturn. On the contrary, the report noted that there were no factors that could have an impact on the upward trend of Beijing's housing prices; hence, Beijing's property prices would be still in the upturn even hit record high.

By People's Daily Online
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