Growth of real estate prices expected to cool down
May 22, 2018 Category China News Round-up, Weekly
Real estate prices are expected to cool in Beijing and Shanghai, and in lower-tier cities this year, according to the Blue Book of Real Estate by the Chinese Academy of Social Sciences (CASS). The report predicted that house prices in first-tier cities were unlikely to bounce back in the short term and that housing prices in Beijing will keep going down, even as new growth points emerge in cities around the capital. The rental market will become the major focus in cities such as Chongqing, Guangzhou and Nanjing.
Investment growth in property development has remained stable in 2017 at more or less the same levels as that of 2016, the report said, adding that the focus of housing policies in 2018 would be to stabilize the market. “The curbs on personal mortgages are unlikely to be relaxed from a short-term perspective in 2018,” said Wang Yeqiang, Researcher at the Institute for Urban and Environmental Studies of the CASS. “In the long term we need to further balance the supply and demand of land, promote the rental market and implement long-term policies to gradually replace the restrictions on personal mortgages,” he added.
Experts said the current ways to cool down the red-hot market, including limits on house purchases and housing loans are only suitable as a short-term solution, but are not good for the property market’s long-term healthy development. “Although over 100 cities have implemented policies to curb personal purchases, it is not a long-term solution,” said Wang. “The nation’s real estate market is in urgent need of long-term reforms.” He added that there is still enough room for an increase in the interest rate on mortgages. Tao Ran, Professor of Economics and Finance at Renmin University of China, said imposing restrictive policies on housing loans is not a sustainable way to regulate the property market. He suggested that one way to regulate the property market is to further develop the rental sector, which will allow developers to earn profits earlier and limit speculation, the China Daily reports.
Property sales growth slowed to 1% in the first four months of the year, compared with 8% growth in the same period last year. In April alone, sales dropped 4% from a year earlier.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world