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Signs that property market is cooling
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CHINA’S property market appears to be cooling after several cities took steps to control rising prices.
On Saturday, Shanghai adopted measures that included increasing land supply and strengthening supervision of capital to address its red-hot housing market.
The city said it would be increasing the supply of land for commercial housing construction and forming a work team composed of staff from government departments to regulate funding sources for land purchases.
The city will also enhance supervision of the purchase of homes previously owned but never used. Stricter supervision of new home prices will also be implemented.
Authoritative property market information will be released on a regular basis to stabilize market expectations, the city government said.
Also on Saturday, Nanchang, capital of east China’s Jiangxi Province, adopted a number of measures to restrict home buying.
In certain districts, residents who own one or more houses will not be allowed to buy new homes. People without Nanchang hukou, or household registration, who own one or more houses will not be able to buy new or pre-owned houses.
First-time home buyers will be required to make a minimum down payment of 30 percent, compared to 20 percent previously.
Statistics show that over 90 percent of cities surveyed in August reported new home price rises, up from 73 percent in July. Central bank data showed that banks in August issued 529 billion yuan (US$79 billion) in household loans, with mortgages accounting for 55.7 percent of the total.
Since September 30, a dozen cities, large and small, have rolled out policies ranging from higher down payments to home purchase restrictions to curb speculative purchases.
Government concern at prices
Central Bank Governor Zhou Xiaochuan said last week that the government was very concerned about recent rises in home prices and would be taking active steps to regulate the market.
He was speaking at the Fourth G20 Finance Ministers and Central Bank Governors Meeting in Washington last Thursday.
Sun Qiang, a real estate agent in Beijing, said the higher down payments introduced in the capital on September 30 had discouraged many buyers.
“I was busy for all of September, and I even took 10 groups of clients to see houses one day,” he said. “But during the first three days of October, I only received two groups.”
Hu Jinghui, vice president of real estate agency 5i5j, said records showed that purchase contracts for 204 new houses in the capital were signed from October 1 to 6, down 73.7 percent on the same period in September and a year-on-year drop of 42.2 percent.
According to the agency’s branch Hangzhou City, an estimated 20 to 30 percent of clients would be canceling or delay home buying plans due to the tightening of credit.
In Tianjin, the transaction volume for pre-owned houses through 5i5j.com during the first six days of October dropped by 50 percent from the same period in September.
Zhang Jie, head of tmsf.com, a Hangzhou-based housing market research institute, said the significance of transaction volume during the first week of October was limited.
However, he said that a series of control measures by the city had curbed the demand for property.
“A growing number of buyers are in a wait-and-see mood,” he said.
Yan Yuejin, an analyst at E-house China R&D Institute, said prices would gradually drop to a reasonable range.
Jia Shenghua, a real state researcher at Zhejiang University, said control measures are expected to achieve positive results, but more policies were needed to stabilize the market.
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