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Room For Prices To Fall, Says US Expert

A REAL estate law expert said yesterday that home prices in Beijing and other large cities in China still had further room to fall.

Ashley Howlett, a partner in the United States Jones Day law firm, said the government's affordable housing projects and high housing inventories might exert further downward pressure on prices in some big cities.

The government last November unveiled a 4-trillion-yuan (US$585 billion), two-year economic stimulus plan, with 400 billion yuan to be channeled into affordable housing projects.

The government has pledged that 7.5 million affordable homes will be provided in cities, and 2.4 million in other areas by the end of 2011. This year alone, 2.6 million urban and 800,000 rural homes would be built.

Figures from the Ministry of Housing and Urban-Rural Development showed that the commercial housing inventory across the country was 164 million square meters at the end of 2008, up 21.8 percent year on year.

Howlett said that although sales were picking up, homes in Beijing and other big cities still were over-priced.

He said prices in the US, Britain, Spain and other countries had fallen much more than in China, which made those markets more attractive to investors.


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