As Chinese home buyers anticipate a significant decline in the nation's runaway property prices, experts are optimistic that the market is moving toward a "turning point" just one year after the government introduced tough restraints on the market.
The measures were rolled out at the end of September last year and have been referred to as the "toughest measures in history." But they are gradually paying off, as falling demand and rising supplies of affordable homes are pushing the market away from excessive growth, experts said.
Yang Hongxu, an analyst with Shanghai-based E-house China Research and Development Institute, said he expects the prices of new homes in Chinese cities to drop from August to September.
According to the National Bureau of Statistics (NBS), 16 cities saw month-on-month declines in prices of new homes in August, up from 14 in July. Meanwhile, prices in 30 cities remained unchanged.
Chinese property developers are suffering from capital strain and high levels of debt, as government tightening measures, including purchase limits in cities and higher down payment requirements for second homes, have significantly cut the amount of home transactions this year, said industrial insiders.
Data from the 5i5j Real Estate Service Company, a leading Chinese property intermediary, showed that transactions involving new homes in Chinese cities that had implemented purchase limits dipped 23.3 percent in the first half of this year from the second half of last year.
The China Index Academy (CIA), a Beijing-based company that studies China's property market, said in its latest report that although September is usually a peak season for home trading, transactions in more than 12 of the 35 Chinese cities the CIA monitors have shown a year-on-year decrease of 30 percent in the last two weeks.
During the first half of the year, Chinese developers faced a five-year-high average asset-liability ratio of 75.3 percent, according to a report from Guangfa Securities.
Lu Qilin, a researcher from Shanghai Deovolente Realty, said that based on the current policies and future expectations, it might not be a good idea for developers to keep their properties at high prices, and they should promote their products by lowering prices or offering discounts.
The introduction of property tax and the large-scale construction of affordable housing this year have also played significant roles in cooling the market, said experts.
In China's southwestern Chongqing Municipality, the local government has not followed other major cities in implementing a home purchase limit, as the introduction of a property tax had already contained the rise of home prices at a low level, said Chongqing's Mayor Huang Qifan.
In the beginning of this year, property taxes were levied in the city of Chongqing as well as the country's eastern economic powerhouse of Shanghai.
Meanwhile, the central government has pledged to build 10 million government-subsidized affordable housing units this year and 36 million additional units over the next five years, which is seen as a long-term solution for reducing market speculation.
However, market observers also warned that this requires further protection from legislation and government regulations, as the affordable housing system is in its infancy and unattractive to local governments, developers and financial institutions.
Experts are also urging local governments to be accountable for excessive growth in property prices, which was listed among the government measures last year but was never fully implemented.
Li Guoping, chairman of the real estate consulting firm Top Consult, said local governments are not always strict about implementing the central government's policies.
Local governments are reluctant to carry out the new round of purchase limits in second- and third-tier cities, let alone promote administrative accountability, said Li.
The measures were rolled out at the end of September last year and have been referred to as the "toughest measures in history." But they are gradually paying off, as falling demand and rising supplies of affordable homes are pushing the market away from excessive growth, experts said.
Yang Hongxu, an analyst with Shanghai-based E-house China Research and Development Institute, said he expects the prices of new homes in Chinese cities to drop from August to September.
According to the National Bureau of Statistics (NBS), 16 cities saw month-on-month declines in prices of new homes in August, up from 14 in July. Meanwhile, prices in 30 cities remained unchanged.
Chinese property developers are suffering from capital strain and high levels of debt, as government tightening measures, including purchase limits in cities and higher down payment requirements for second homes, have significantly cut the amount of home transactions this year, said industrial insiders.
Data from the 5i5j Real Estate Service Company, a leading Chinese property intermediary, showed that transactions involving new homes in Chinese cities that had implemented purchase limits dipped 23.3 percent in the first half of this year from the second half of last year.
The China Index Academy (CIA), a Beijing-based company that studies China's property market, said in its latest report that although September is usually a peak season for home trading, transactions in more than 12 of the 35 Chinese cities the CIA monitors have shown a year-on-year decrease of 30 percent in the last two weeks.
During the first half of the year, Chinese developers faced a five-year-high average asset-liability ratio of 75.3 percent, according to a report from Guangfa Securities.
Lu Qilin, a researcher from Shanghai Deovolente Realty, said that based on the current policies and future expectations, it might not be a good idea for developers to keep their properties at high prices, and they should promote their products by lowering prices or offering discounts.
The introduction of property tax and the large-scale construction of affordable housing this year have also played significant roles in cooling the market, said experts.
In China's southwestern Chongqing Municipality, the local government has not followed other major cities in implementing a home purchase limit, as the introduction of a property tax had already contained the rise of home prices at a low level, said Chongqing's Mayor Huang Qifan.
In the beginning of this year, property taxes were levied in the city of Chongqing as well as the country's eastern economic powerhouse of Shanghai.
Meanwhile, the central government has pledged to build 10 million government-subsidized affordable housing units this year and 36 million additional units over the next five years, which is seen as a long-term solution for reducing market speculation.
However, market observers also warned that this requires further protection from legislation and government regulations, as the affordable housing system is in its infancy and unattractive to local governments, developers and financial institutions.
Experts are also urging local governments to be accountable for excessive growth in property prices, which was listed among the government measures last year but was never fully implemented.
Li Guoping, chairman of the real estate consulting firm Top Consult, said local governments are not always strict about implementing the central government's policies.
Local governments are reluctant to carry out the new round of purchase limits in second- and third-tier cities, let alone promote administrative accountability, said Li.
