Property market shows signs of cooling down

The price of housing has been rising rapidly since 2003. It rose from 2,197 yuan per square meter in 2003 to 5,850 yuan per square meter in 2013, with an annual increase of 10.3 percent, according to Wind Information Co Ltd, a Shanghai-based financial data provider.

Ren Xingzhou, a researcher in the market economy division of the Development Research Center of the State Council, warned against blind stimuli policies to prevent future declines in real estate investment.

Developers expect house market to stabilize

Home price growth slows, further moderation eyed

NBS data showed the growth rate of investment in property development was 19.8 percent in 2013, compared to only 11.41 percent in 2012, Ren said.

Despite this, Ren has forecasted real estate investment to go down due to slow growth in land supply.

The decline of investment growth in real estate will inevitably slow down the growth of investment in fixed assets, thereby weakening the driving forces of China's economic expansion and causing pressure on local finance, taxation and employment, Ren said.

But China should not stimulate the real estate market by relaxing credit, land and taxes. If such policies were blindly adopted, serious overcapacity would occur in the real estate sector, he said.

Since 1998 when housing reform began in China, the sector has become more market-oriented, with rapid growth in residence investment and housing supply.

Investment in urban residences rose from 431.1 billion yuan in 1998 to 5.9 trillion yuan in 2013, with annual growth of 19 percent, according to Wind Information Co Ltd.

Urban residents have enjoyed an increase in per capita housing area from 18.7 square meters in 1998 to 32.9 square meters in 2012, according to the data provider.

 

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