House Prices to Remain Stable This YearHouse prices in China are expected to be stable or rise slightly this year, experts predict."Overall prices are unlikely to fall because the country's economy is doing well," said Mo Tianquan, secretary-general of China Real Estate Index System. Statistics indicate that China's economy grew by 8 per cent in 2000 and is expected to grow by 7 per cent this year. Strong demand for homes from individuals because of housing reforms will hold prices at high levels, he said. "Individual purchasers have become the mainstay of the country's housing market," Mo said. "More than 90 per cent of last year's homebuyers were individuals." The increased number of mortgages offered by commercial banks has also fuelled the market. His view was shared by Gu Yunchang, secretary-general of the China Real Estate Association, who believes overall house prices have begun an upturn. Meanwhile, housing quality has also improved considerably during the past few years, he said. But factors such as fierce market competition and the increasing supply of low-cost housing will hold back prices somewhat, Gu said. "Prices will be mainly decided by the market," he said. Johnson Hu, vice-general-manager of Century 21 Real Estate China, said the market has entered a rational period, as institutional buyers gradually faded away. Prices in Shanghai, Shenzhen and certain other coastal regions have dropped to almost their lowest level over the past year because of an oversupply and buyer caution. However, prices in Beijing seem immune to the nationwide price plunge. The national average price was 2,091 yuan (US$251.9) per square meter, while the average price in Beijing was about 4,000 yuan (US$481.9) per square meter. This is because the city is short of housing. "There is little room for prices to drop in Beijing," Hu said. "Despite the fact that there is an oversupply of shopping centers and luxury office buildings, the city is still short of affordable residential housing." These high prices mean developers have a better chance making profits in Beijing than in other regions, he added. Besides an imbalance between supply and demand, the high cost of land also keeps housing prices high in the capital. Most developers have to buy land from State-owned factories or government agencies, instead of buying using a public bidding process. Another reason for Beijing's high prices, Hu said, is that most houses have so far been sold to central government units.(China Daily) |
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