China to stay fast to real estate policies
Updated: 2011-12-15 09:29
By HU Yuanyuan (China Daily)
BEIJING - To make home prices more reasonable, China will unswervingly adhere in 2012 to property regulations it adopted this year, according to a government statement released Wednesday.
Experts said that determination is likely to lead to a further decline in property sales, prices and investments next year.
The government's latest resolve to curb property prices came at the Central Economic Work Conference.
"As the government's rigorous real estate measures continue, property sales, the floor space in new projects, land sales and property development will all decrease in the first quarter," said Qin Hong, deputy director of the Ministry of Housing and Urban-Rural Development's policy research center.
Gao Ting, chief China strategist at the financial services company UBS AG, had a similar opinion.
"Some property developers used to take a wait-and-see attitude, believing there might be a chance the government would loosen real estate policies a bit during the central economic conference," Gao said. "Their disillusion (at seeing that not happen) will encourage them to cut prices to stimulate sales more decisively."
The international rating company Fitch said in a recent report that a slowdown in contract sales, and the fact that homebuilders have slowed down their work, will lead to a slower pace of economic growth in 2012.
For Qin, November was a turning point in the Chinese property market. Before that, home prices had dropped mainly in the country's largest cities. Afterwards, though, the decline began to spread to smaller places.
"With the central government's determination to curb the property market, we expect transaction volumes to drop further in the coming year," said Helen Liu, general manager of Beijing Holdways Information & Technology Co Ltd, a real estate service provider.
"However, since the property market can greatly affect the financial system and economy, a property market slump is unlikely to happen, given the close ties between local governments and the property market.
"Price corrections are expected to remain mild in the near future, with the government possibly reviewing and, to some extent, loosening some tightening measures if prices go down by 20 to 30 percent next year."
The government also plans to spend more on subsidized housing, according to the Central Economic Work Conference.