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No notable property price correction seen

CHINA'S real estate market should not see a significant price correction, the Chinese Academy of Social Sciences said yesterday, adding that the market may possibly recover as early as in the second half of this year.

Housing prices may continue to fall through the first half but they might stabilize in the second half, the academy concluded in its latest report on real estate development.

"It is true that a gloomy global economic outlook and an industry correction have been driving home prices downward over the past months," said Li Jingguo, the main author of the report. "However, deep price cuts are still not likely as speculation has been effectively curbed by the central government while market demand is still there."

The latest government statistics also indicated a similar trend. Prices in 70 medium and large-sized cities fell 1.3 percent year on year last month, extending losses for the fourth consecutive month, the National Development and Reform Commission said.

Nationwide, on an annual basis, prices for new homes fell 1.9 percent and those for second-hand homes dipped 0.4 percent, said the commission, China's top economic planner. On a monthly basis, they edged up 0.1 percent and 0.3 percent respectively.

While the annual report is generally optimistic over the real estate industry, it warned that some developers may still find it harder to survive and Li said cash-strapped small firms are more vulnerable to market changes.


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