Home prices 'unlikely' to heat up this autumn
Updated: 2012-09-25 09:10
By Hu Yuanyuan (China Daily)
China's home prices and sales may gain some stability in September and October - months in which the property market usually heats up, industry analysts said on Monday.
"The demand from self-use homebuyers was largely met after home sales saw a strong rebound in July and August," said Carlby Xie, head of research at the real estate consultancy Colliers International (Beijing).
"And the government has policies in the pipeline to prevent home prices from rebounding significantly. So a big price rebound in this usually hot season isn't likely."
Related reading: Home prices on the rise in 100 cities
The Beijing International Property Autumn Expo, a four-day event that is generally regarded as a barometer of the real estate market, had welcomed 139,000 guests this year by the time it ended on Sunday, down from the 145,800 who attended the spring expo, according to the organizer of the event.
But the two expos had at least one important difference.
At the spring event, many developers had tried to attract buyers by greatly reducing their prices. Only two developers in Beijing did the same this fall, the organizer said.
Zheng Xiangdong, deputy secretary of the expo's organizing committee, said that trading in the real estate market has been brisk in the past few months and market sentiment has become more optimistic, both possible reasons why fewer discounts were offered in the fall.
About 80 percent of the people who attended the recent expo said they plan to buy a home soon, the organizer said. People between the ages of 25 and 35 made up 54 percent of the visitors. As for market demand, 64 percent of those in attendance said they were planning to buy a first home and 16 percent said they wanted to buy an apartment to improve.
"Some people have again begun to take a wait-and-see attitude," said Hu Jinghui, vice-president of 5i5j Real Estate. "Home sales in the remaining months of the year could hardly exceed those in July and August, and the prices will also be more stable."
Wang Qian, a 28-year-old company executive, said she is annoyed at herself for not having bought an apartment earlier this year. She had started to look for one at the beginning of 2012, a search that brought her to the spring expo.
"Now I have fewer choices, and I'm also afraid that prices will continue rising," said Wang.
She added that she isn't certain if it would be better to buy now or wait until the end of the year.
Meanwhile, most of the projects exhibited at the expo hailed from cities outside Beijing. A large number of them were related to care for the elderly or tourism.
According to research by World Union Properties, a property consultancy agency, the market for retirement homes and similar operations will be as large as 600 billion yuan ($95 billion).
"An increasing number of property developers, especially State-owned and large-scale enterprises, have made a serious commitment to that industry," said Lin Wei, vice-president of World Union.
Meanwhile, some property developers, especially those with a steady cash flow, have begun to introduce homes into the market at a slower pace, and will instead put a greater emphasis in the fourth quarter on vacant parcels of land.
The Chinese government is working on several plans to prevent property prices from rebounding significantly, the People's Daily cited an unnamed official source as saying over the weekend.
Since 2010, the government has been taking control measures to curb speculative investment in property. Even so, home prices have been increasing.
The central government has repeatedly said it is committed to controlling the property market.
The Beijing land reserve center, for instance, said on Friday that it had suspended the sale of land parcels as it tries to bring stability to market expectations.
According to the National Bureau of Statistics, 96.4 billion yuan worth of land sales were recorded in August, a record high for the year.
The government's real estate policies are directly related to the country's economy.
Huang Yiping, an economist at the Barclays Plc, said the prospects for stable economic growth depend largely on whether investment will increase or not. Such spending is likely to be driven by infrastructure projects that are paid for by the central government, especially in the railway and property industries.
Many economists say the government will succeed in its attempt to make the economy more stable and predict the country's GDP will grow at 8 percent in 2012, according to a recent survey by the website NetEase.