Property market to stall as new regulations bite
Updated: 2011-02-09 08:15
By Hu Yuanyuan (China Daily)
Twenty percent of Beijingers will be unable to buy a new apartment
BEIJING - Around 20 percent of registered residents in Beijing will not be able to buy a new apartment this year after the new round of policy tightening kicks in.
That could lead to a 20 to 30 percent fall in property sales and stall price growth, according to industry experts.
The Chinese capital, which experienced the biggest surge in property prices (42 percent) nationwide last year, is expected to roll out its new detailed property regulations around mid-February, in line with the central government's requirements.
The State Council launched a new round of measures on Jan 26 to rein in property prices. Besides raising the minimum down payment for second-home buyers to 60 percent from the current 50 percent, it also further tightened rules restricting home purchases.
People who own one apartment are allowed to buy another, but those with two apartments will not be permitted further purchases, according to the State Council's statement.
The new measures are expected to further cool speculation in the housing market after property prices in 70 major cities posted their fourth straight month-on-month rise.
According to a survey by the central bank in the fourth quarter of last year, 72.4 percent of Beijing residents have their own apartments, with 18.3 percent of them, or 800,000 families, owning several.
"That means around 20 percent of Beijing-registered residents, or 800,000 families, will be unable to buy a new apartment this year. That will probably lead to a 20 to 30 percent fall in property transactions," said a report from Centaline Group, a Hong Kong-headquartered real estate agency.
With the new round of measures coming into force, property prices in key cities will stop growing and those in suburban areas will decline. More than 60 percent of potential buyers may adopt a wait-and-see attitude, the report said.
For Wang Yulin, deputy director of the policy research office of the Ministry of Housing and Urban-Rural Development, property prices will stop growing this year due to the new round of tightening and trials to levy a property tax in Shanghai and Chongqing.
"However, due to ample liquidity in the market, the property price is not expected to fall right now," said Wang.
Property prices registered their smallest year-on-year gain in December, after peaking at 12.8 percent in April.
Despite the slowing annual growth rate, property prices in 70 surveyed cities posted their fourth straight month-on-month rise, with the gain in December standing at 0.3 percent, according to the National Bureau of Statistics.
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