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Housing loses its appeal as preferred investment
By Feng Jianmin |
December 23, 2011, Friday
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Print Edition
Print Edition
THE number of Chinese people intending to buy homes has dropped to its lowest since 2008, with housing losing its appeal as the most preferred investment option for individuals, a central bank quarterly survey showed yesterday.
About 13.9 percent of respondents said they planned to buy a home in the next three months, down 0.3 percentage points than a quarter ago, the lowest since the People's Bank of China included the question in its quarterly household survey in 2008, the bank said yesterday.
The survey was released after data showing that an increasing number of Chinese cities reported falls in new home prices last month.
Excluding government-funded affordable housing, prices fell in 49 out of 70 cities in November, the National Bureau of Statistics said. That compared to 17 in September and 34 in October.
"The real estate industry has entered a chilly winter," China International Capital Corporation said in a report yesterday. "Home transactions and prices will continue to fall next year, and may reach the bottom in the third or fourth quarter."
More households in Shanghai and Beijing said they were expecting prices to drop, the central bank survey showed.
Nationwide, 20.8 percent of respondents said they expect prices to fall compared to Shanghai's 26.8 percent and Beijing's 28.5 percent.
The Shanghai figure was up by 22.8 percentage points compared to the previous quarter.
Housing has been replaced by "funds and wealth management products" as Chinese people's favorite investment option for the first time since the question was added in the fourth quarter of last year, the bank said.
About 22.5 percent of respondents said they would invest in funds and wealth management products, while only 16.5 percent said they still preferred housing as an investment, down 7.1 percentage points from the third quarter.
Rapidly rising inflation and low interest rates for deposits boosted investors' demands for products with higher returns.
Tight market liquidity also encouraged banks to offer such products to ensure capital as deposits shrank.
Bonds came third with 16.4 percent respondents favoring them, and stocks took last place with 9.7 percent.
The survey also found a decrease of inflationary pressure among households.
An index measuring expectations for consumer price rises fell to 65.4 percent in the fourth quarter, 9.4 percentage points lower than last quarter and 16.4 percentage points lower than last year.
The survey was conducted in 50 major cities in China earlier this quarter and involved some 20,000 households.
Another two surveys, which interviewed entrepreneurs and bankers, revealed expectations for a cooler economy in China.
An index measuring bankers' expectations for the overall economy slid below the neutral reading of 50 percent for the first time in two years. The reading was 48 percent, indicating a gloomy outlook.
A similar index measuring entrepreneurs' expectations lost 6 percentage points from last quarter to 41.7 percent, a figure that was below the neutral reading for the second month.
About 13.9 percent of respondents said they planned to buy a home in the next three months, down 0.3 percentage points than a quarter ago, the lowest since the People's Bank of China included the question in its quarterly household survey in 2008, the bank said yesterday.
The survey was released after data showing that an increasing number of Chinese cities reported falls in new home prices last month.
Excluding government-funded affordable housing, prices fell in 49 out of 70 cities in November, the National Bureau of Statistics said. That compared to 17 in September and 34 in October.
"The real estate industry has entered a chilly winter," China International Capital Corporation said in a report yesterday. "Home transactions and prices will continue to fall next year, and may reach the bottom in the third or fourth quarter."
More households in Shanghai and Beijing said they were expecting prices to drop, the central bank survey showed.
Nationwide, 20.8 percent of respondents said they expect prices to fall compared to Shanghai's 26.8 percent and Beijing's 28.5 percent.
The Shanghai figure was up by 22.8 percentage points compared to the previous quarter.
Housing has been replaced by "funds and wealth management products" as Chinese people's favorite investment option for the first time since the question was added in the fourth quarter of last year, the bank said.
About 22.5 percent of respondents said they would invest in funds and wealth management products, while only 16.5 percent said they still preferred housing as an investment, down 7.1 percentage points from the third quarter.
Rapidly rising inflation and low interest rates for deposits boosted investors' demands for products with higher returns.
Tight market liquidity also encouraged banks to offer such products to ensure capital as deposits shrank.
Bonds came third with 16.4 percent respondents favoring them, and stocks took last place with 9.7 percent.
The survey also found a decrease of inflationary pressure among households.
An index measuring expectations for consumer price rises fell to 65.4 percent in the fourth quarter, 9.4 percentage points lower than last quarter and 16.4 percentage points lower than last year.
The survey was conducted in 50 major cities in China earlier this quarter and involved some 20,000 households.
Another two surveys, which interviewed entrepreneurs and bankers, revealed expectations for a cooler economy in China.
An index measuring bankers' expectations for the overall economy slid below the neutral reading of 50 percent for the first time in two years. The reading was 48 percent, indicating a gloomy outlook.
A similar index measuring entrepreneurs' expectations lost 6 percentage points from last quarter to 41.7 percent, a figure that was below the neutral reading for the second month.
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