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Housing prices to decline on resolute curbs
2011-12-15 00:03

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.

The market commonly believes that drops in home prices in 2012 will be as high as 15 percent to 20 percent, said Zhao Xiao, professor with University of Science and Technology Beijing.

At present, the housing sector is experiencing a cold winter as sales fall sharply.

Last week, the number of units of commercial housing sold in 27 of 35 major cities dropped substantially from the same period last year, according to a statement released Tuesday by the China Index Academy, a leading institute focusing on real-estate research.

The statement said that 13 cities saw sales declines of more than 50 percent. Guiyang, provincial capital of Guizhou, had the largest decline - 74.09 percent.

In November, commercial housing sales in China slipped 1.2 percent year-on-year, according to data released Friday by the National Bureau of Statistics (NBS).

The total area of commercial housing sold during the period dipped 1.7 percent year-on-year, while the sector's climate index, which reflects its overall condition, fell to 99.87 points from October's 100.27 points, the NBS said.

Major Chinese developers have witnessed dramatic declines in housing sales.

China Vanke, the country's largest developer, saw its total area sold and sales volume plummeting 26 percent and 20 percent month-on-month, respectively.

Since April 2010, China has imposed a raft of measures aiming to calm property prices. They include higher down payments, limits on the number of houses that people can own, the introduction of a property tax in some cities and the construction of low-income housing.

To gear the property market toward healthy development, China has also begun the construction of affordable housing units, aiming to build 36 million subsidized housing units by 2015. China's housing authorities announced in early November that they have already met this year's construction goal.

 

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