BEIJING, Jan. 11 -- It's virtually impossible for major Chinese cities to meet their housing price control target set for 2013, experts say.
The prices of newly-built housing in the four first-tier cities, namely Beijing, Shanghai, Shenzhen and Guangzhou, kept a 20 percent growth rate from September to November, according to statistics published by National Bureau of Statistics.
The statistics also show that the new housing prices in 26 other major cities have been growing at over 10 percent in the same period.
“Generally speaking, it’s virtually impossible for the four first-tier cities, namely Beijing, Shanghai, Shenzhen and Guangzhou, to meet their annually housing price control targets,” Zhang Dawei, director of research at Centaline Property, a real estate agency, said. “As for cities with over 10% growth rates, it’s also the same.”
In early 2013, the State Council issued new regulations on housing market, which stipulated that local governments should set annual price control target for newly-built residence. Later, governments in major cities proposed that the price growth should not exceed the actual growth of disposable income, except for Beijing and Shanghai, which proposed that the price should remain “stable”.
However, statistics show that, adjusted for price factors, the actual growth of disposable income in most second-tier cities in China is less than 10 percent, outpaced by the growth of housing prices.
One of the reasons behind this, according to Zhang, is that local governments lack real motives for price control. They have been heavily relying on the income of land sale, which has been growing due to the prosperity in housing market. “It’s inevitable that they fail to meet their targets.” Zhang added.
Housing price control targets are governments' promises, failing to meet them will only affect their credibility among people, said Chinese economist Ma Guangyuan.
In the future, price control methods may be subject to change, according to Zhu Zhongyi, vice-director of China Real Estate Association. Local governments will gradually sideline the price control targets, and push forward reform on land ownership, real estate tax and property registration system.
These measures are expected to play a more effective role in the control of housing prices in the new year, the experts believe.