Cool housing market persists in China

BEIJING -- In October, a month usually known for a boom in housing sales, the prospects of the real estate market in China are dim as consumers adopt a wait-and-see attitude.

At a sales section of a residential property named Vanke Lan in Fengtai district of Beijing, a woman surnamed Chen inquired the prices and shook her head when asked about her purchase intention.

"House price are still higher than I expected," she said. "Given the fact that the interest rates of bank loans are not that attractive, I will not buy an apartment right away."

Consumers seem more rational in making their purchase decisions. There are fewer cases of panic buying, according to a salesperson of China Vanke Co Ltd, developer of the property.

Vanke Lan has two types of offer, three-bedroom apartments of 96 square meters and two-bedroom apartments of 82 square meters. The average price is about 30,000 yuan ($4,743) per square meters, the salesperson said.

Statistics from Centaline Group, a real estate agency, show that 11,030 new apartments were sold in the Chinese capital in September, the lowest among the past four months and down by 24 percent from that of August.

The number of properties that will be released for sale October in Beijing is estimated to be about 30, much less than that in previous years, Centaline said.

Real-estate mogul Pan Shiyi said that the property market not only depends on the supply and demand, but also, to a large extent, is affected by national policies.

The Beijing land reserve center recently blocked the sale of 10 plots of land to developers, in a bid to bring down the market expectations of a new round of property boom.

As of Sept 29, the area of land ready for property development totaled 1.13 million square meters, of which 28.8 percent or 326,000 square meters will be used for building affordable housing.

"This signals resolve of the government to curbing property prices," said Zhang Dawei, head for market research of Centaline Group.

Even in the face of growing downward pressure on the national economy, many experts believe China should and will stick to the measures to cool off the property market.

The gross domestic product growth rate of the first half of 2012 was 7.8 percent, the first time in the past three years below 8 percent, according to statistics from the National Bureau of Statistics.

China also faces an urgent need to increase efficiency of land use, Minister of Land and Resources Xu Shaoshi said in late September.

Local governments rely on land sales as an important source of revenue, which pushes the land prices up, resulting in housing price hikes.

Therefore, the fundamental solution to an overheated housing market is to change the role of the government, which is a demanding task and requires changes of the government's management mechanisms.

Experts believe that although there are many obstacles in regulating the housing market, it is a task that must be done.

"It's like taking medicine to treat your illness. If one is not able to stand bitter tastes of medicines and give up treatment, the illness will never be cured," said Li Tiegang, head of the real-estate research center at Shandong University.