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Special> Video> Latest
UPDATED: February 23, 2011
Housing Prices Not Likely to Fall by Much


Some expect that dozens of cities in China will step up property market curbing measures in the near future. Analysts say these moves may cut trading volumes by 20 to 30 percent. Housing prices may also fall, but not significantly.

Analysts say the curbing measures will encourage more Beijing house hunters to wait and see, and the trading volume will slump in the near future - by up to 30 percent. But due to insufficient supply, property prices aren't likely to fall by much. As the measures taken in second and third tier cities aren't as restrictive as those implemented in first tier cities, trading volumes there will only fall by 5 to 10 percent.

As the intensity of the Government's curbing measures is stepped up, increasing pressure will be on developers. They may cut their prices to increase sales. Analysts predict trading volumes will be flat in February and March, and housing prices will hit their lowest starting from as soon as the second quarter.

Meanwhile, it will cost home buyers more to purchase a home. The central bank has raised interest rates three times in four months, and the mortgage rate discount offered by commercial banks is becoming scarce. Analysts say these factors have increased purchasing costs, and may even discourage some first time home buyers.

They add, investment and speculation will be reined in by the controlling measures. But if reasonable demand is also curbed, the housing market will be very sluggish in the first half of the year.

(CNTV.cn February 22, 2011)


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