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Housing prices set to fall 8-10%

HOUSING prices in China are likely to drop by 8 percent to 10 percent in 2009, with some of the big cities like Beijing and Shanghai set to see a 15-percent to 20-percent decline, said a researcher at the Chinese Academy of Sciences.

Chen Xikang, a researcher at the Academy of Mathematics and Systems Science, CAS, said yesterday that the estimates are made based on both economic models and observations of developments in China's housing market in past years.

Chen, also a consultant with the World Bank, originally made the remarks at a forum on China's economy held in Beijing on Sunday.

"Housing prices have far surpassed the actual income of the general public," Chen pointed out.

High housing prices have long been a target of public criticism in China, particularly in large cities.

The Beijing Municipal Statistics Bureau figures showed that the average yearly income of the capital's residents at around 40,000 yuan (US$6,000) in 2007.

The apartments in Beijing, however, were sold at above 10,000 yuan per square meter within "the fifth ring," or the city's downtown areas.

Zhang Qi, a professor at the Institute of Economic and Resources Management at Beijing Normal University, warned, "The 2009 year is definitely a hard one for the real estate market."

Zhang said the property market is unlikely to quickly rebound.


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