PETER CAO, chairman of the board of directors of Yadong International Real Estate Development Company, has been closely following the impact of the purchasing restrictions on China s housing markets unveiled last month in many cities.
He remains optimistic.
The purchase limits are one of the Chinese Government s strictest policies to cool the housing market, but it s not scary, Cao said.
The policies show the determination of the government, but as for the policy s real impact, we ll have to wait and see.
The State Council issued a series of regulations Jan. 27, stipulating that cities, especially those with high housing prices, must issue detailed purchasing restrictions on housing by the middle of February.
Beijing unveiled the toughest measures ever Feb.16, prohibiting home purchases by non-local registered families who have no proof of social security contributions or income tax payment in the Chinese capital for five straight years.
Following Beijing, more than a dozen Chinese cities, including Shanghai, Tianjin and Shijiazhuang, have capped the number of apartments a family can buy, thereby raising the level of difficulty for non-residents to buy apartments for investment.
Home sales fell sharply after the restrictions were made known. Take Beijing for example, the city reported sales of 3,436 new homes in February, down 70 percent from the sales figure in January, according to Beijing s real estate transaction management Web site run by the municipal commission of housing and urban-rural development.
Existing home sales slumped 64.3 percent month on month to 8,376 units in February, the lowest volume in 25 months.
Real estate developers have remained calm while they wait for further results.
Prices of more than 90 percent of housing projects remained stable last month, said Zhang Dawei, an analyst with Centaline Property in Beijing. Centaline Property projects no large correction in housing prices because supply remained at low levels in the first half of 2011, he said.
I believe new policies will emerge in one or two years, so many real estate developers have adopted a wait-and-see attitude, especially those who have strength, said Zhao Ertian, a real estate agent for Hebei Guoda Real Estate Agency.
Housing prices could soar when the new policy emerged, said Zhao, because potential buyers will wait to see whether property prices will fall. Once the policy changes, people who have waited will fear the price will go up and they ll start to buy. Purchasing limits will not curb real demand. So housing price will soar then.
Besides waiting, we have other methods to survive this slack season, said Wang Shiqing, sales director of Hebei Yixing Real Estate Company. For example, we change some of our home projects to office buildings.
Chinese Premier Wen Jiabao on Sunday reiterated his determination to rein in the country s soaring housing prices during an on-line chat with the public.
Many experts suggest using a property tax as a way to cool the market in the long run.
How will the purchasing limits affect the market? We can t say now. People all have to wait and see. But I believe a property tax together with the government subsidized housing projects would be the means to solve the problem in the long run, said Liang Yuemin, a deputy researcher for Hebei Provincial Academy of Social Sciences.
Zhu Zhongyi, deputy director of the China Real Estate Association, also said a properly levied property tax could solve the problem in the long run, although the introduction of trial property taxes in Chongqing and Shanghai have had very limited impact.
It can t bring about big changes at present, but it does send the right signal, Zhu said.
(Xinhua)
