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News Analysis: China's housing prices to decline in 2012 on resolute curbs

(Xinhua)

08:37, December 14, 2011

BEIJING, Dec. 13 (Xinhua) -- As the Chinese government signaled that it would maintain property-pricing curbs, experts have said that the housing market will go through tough times next year, predicting prices will drop around 15 to 20 percent.

On Friday, the Political Bureau of the Communist Party of China Central Committee announced after a meeting that China will maintain an unswerving stance on regulating the property market next year to ensure house prices return to a reasonable level.

The meeting came ahead of an annual economic work conference, one of the nation's most important economic events, which will set economic policy guidelines for the coming year.

Given the government's resolution to bring home prices down, the property market will see an accelerating process of price and volume declines, analysts have said.

"The government has set a clear tone for reining in runaway housing prices next year," Wang Yulin, vice director of the policy research center under the Ministry of Housing and Urban-Rural Development, told Xinhua on Tuesday.

Wang said that China should retain the tight controls over the property sector, because even a slight change in policy could result in dramatic price rebounds as Chinese people dip into typically large savings to buy.

Dampened by the government's property cubs this year, China's new home prices had begun to drop month-on-month starting from September, said Ding Zuyu, president of the China Real Estate Information Corp.

"New home prices in China will likely see drops year-on-year by January 2012, marking a significant turning point for the property market," he said.

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