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Housing prices on way down, says land minister
By Cao Qian |
July 6, 2010, Tuesday
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Print Edition
Print Edition
HOUSING prices should get significantly lower in some parts of China in a couple of months as tightening measures launched by the central government show more of their effects, according to a senior industry official.
"Sales volume of residential properties in major Chinese cities have already dropped over the past few months while home prices have also stagnated as recent government effort to rein in speculation began to work," Xu Shaoshi, minister of land and resources, said after an industry conference held in Dalian, in northeast China's Liaoning Province, on Sunday.
"Probably in a quarter's time, prevalent price cuts can be anticipated in some areas of the country, though it's hard to predict the extent of price drops at the moment because it will vary from city to city," Xu said.
He said the government will continue to press ahead with tightening measures in the second half of the year.
In mid-April, China raised the down-payment requirement on second-home mortgages to at least 50 percent from 40 percent.
The State Council, China's Cabinet, issued a notice directing banks to suspend housing credit to those buying their third or more homes in an attempt to rein in speculators.
On June 4, Chinese authorities told banks to consider both the creditworthiness and home purchase records of people applying for mortgages, the first time China included home buying records in lending criteria.
The tightening policies - the toughest of their kind ever introduced by the government, according to many analysts - have had an immediate impact on the domestic housing market. First-tier cities such as Beijing and Shanghai were the hardest hit, with the sales volume of homes, both new and existing, dropping significantly over the past two months.
In Shanghai, for instance, sales of new homes, excluding those designated for relocated residents under urban redevelopment plans, dove to 310,000 square meters in May and 420,00 square meters in June, compared with 1.02 million square meters in April, according to Shanghai Uwin Real Estate Information Services Co.
For the first half of this year, transaction volume of new homes plunged 56 percent to 3.57 million square meters in the city, the lowest figure in the past five years, according to Uwin.
"Sales volume of residential properties in major Chinese cities have already dropped over the past few months while home prices have also stagnated as recent government effort to rein in speculation began to work," Xu Shaoshi, minister of land and resources, said after an industry conference held in Dalian, in northeast China's Liaoning Province, on Sunday.
"Probably in a quarter's time, prevalent price cuts can be anticipated in some areas of the country, though it's hard to predict the extent of price drops at the moment because it will vary from city to city," Xu said.
He said the government will continue to press ahead with tightening measures in the second half of the year.
In mid-April, China raised the down-payment requirement on second-home mortgages to at least 50 percent from 40 percent.
The State Council, China's Cabinet, issued a notice directing banks to suspend housing credit to those buying their third or more homes in an attempt to rein in speculators.
On June 4, Chinese authorities told banks to consider both the creditworthiness and home purchase records of people applying for mortgages, the first time China included home buying records in lending criteria.
The tightening policies - the toughest of their kind ever introduced by the government, according to many analysts - have had an immediate impact on the domestic housing market. First-tier cities such as Beijing and Shanghai were the hardest hit, with the sales volume of homes, both new and existing, dropping significantly over the past two months.
In Shanghai, for instance, sales of new homes, excluding those designated for relocated residents under urban redevelopment plans, dove to 310,000 square meters in May and 420,00 square meters in June, compared with 1.02 million square meters in April, according to Shanghai Uwin Real Estate Information Services Co.
For the first half of this year, transaction volume of new homes plunged 56 percent to 3.57 million square meters in the city, the lowest figure in the past five years, according to Uwin.
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