Analysts: Property Market Curbs Continue
    2013-11-19 19:48:32     CRIENGLISH.com         Web Editor: Mao

Many Chinese property analysts expect a continuation of the country's harsh curbs on the property market, in view of October's strong growth of home prices.

Yin Xiuqi has more details.


 

Newly-released official statistics show home prices in 69 of the 70 tracked cities recorded an average growth rate of 9.6 percent in October on a yearly basis.

First-tier cities like Beijing and Shanghai saw rapid rises of over 16.4 percent and nearly 18 percent respectively.

Guangzhou and Shenzhen both recorded a growth rate of over 20 percent.

Chen Jie, a real estate researcher at the Shanghai University of Finance and Economics, says the housing price growth is alarming.

"Most of the tracked cities saw home prices grow about 10 percent on average with the highest growth rate of more than 20 percent. This kind of growth pace is alarming and has put additional pressure on the government for it to cool the property market."

But some other observers have a different opinion after looking into the figures on a month-on-month basis.

Gu Yunchang is deputy President of the China Real Estate and Housing Research Association.

"Generally speaking, the growth of home prices has been on the decline since the second quarter. Although the prices went up, the growth momentum abated."

The pace of growth in new home prices averaged 0.7 percent on a monthly basis in October, slowing 0.2 percentage points compared to September.

When looking forward, many analysts say the government is very likely to maintain its curbs on the market for the sake of a healthy development of the sector.

Chen Jie from the Shanghai University of Finance and Economics explains.

"I think purchasing restrictions will continue to be in place. The restrictions on the mortgage loans will see differentiated practices. The curbs for the first home buyers will be eased, but for the second and third ones the curbs will still be strict. So I think there will be no major changes to these two policies in the short term."

China has been imposing tough policies to cool the overheated property market since 2010.

The policies include restricting the number of homes a buyer can purchase, raising the down payment ratios and levying property taxes in some big cities.

Analysts hope the government may seek a more market-oriented mechanism to build a healthy property market, following the reform plans released last week by the Communist Party of China Central Committee.

The plans stipulate China will step up legislation for property tax, build a unified market for urban and rural construction land to increase supply, and set up a housing database.

For CRI, I'm Xiuqi.

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