Experts: China's housing prices to drop 10 percent

Peking University Guanghua School of Management (GSM) Real Estate Association held a summit forum on the development of China's real estate on May 29. Experts and scholars believe that this year China s housing price will drop by 10 percent to 15 percent.
10 percent drop is by no means sensationalism
Nie Meisheng, chairman of China Commercial Real Estate Commission (CCREC), says that last year's housing price started to stabilize in July, while it rebounded in August. The housing prices of Beijing, Shanghai, Guangzhou and Shenzhen the four major cities of China rose by 20 percent.
"This year's situation is totally different from last year's," Nie says, "Last year's policy continued the moderately easy monetary policy. According to our survey, what is happening now is what was happened in 2008, which saw the control over CPI as the top priority."
She thinks that this year's regulatory policies has transformed from monetary to administrative policies. "So to say that the housing price will drop by 10 percent is not unfounded."
Dong Fan, director of the Real Estate Research Center of Beijing Normal University, also thinks that there will be a 10 percent to 15 percent decline in housing price in the second half year.
'Encourage the developers to build houses for rent'
Qin Hong, deputy director of the policy study department of the Ministry of Housing and Urban-Rural Development, contends that in the conditions of China's current property market, efforts to boost the market supply are still needed.
She thinks the current problem of housing shortages and soaring housing prices are basically the result of the following three aspects. The first factor is the trend of urbanization and increase of urban population. Second, since there are lots of demolitions and reconstructions of urban buildings, 20 percent of the new buildings actually fill the gap of the old buildings. Third, people who used to live in small houses have a demand for bigger ones, which leads to the precipitation of housing accumulation funds.
In order to solve the problem, Qin thinks the government should encourage the developers to build houses for rent because private houses for rent are just a supplement to the total market share.
In terms of the housing property tax, which caused heated discussions in the public recently, Qin says China should base its decisions on national conditions and not imitate other countries.
By People's Daily Online
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