Guangzhou sees effect of property policies (China Daily) Updated: 2005-07-19 06:22
Editor's note: The Chinese central government began implementing tough
measures to curb an over-heated real estate market on June 1. China Daily is
running a series of stories to find out the impact of these policies and how
consumers and developers nationwide are responding to them. Reporter Zhan
Lisheng found that even in Guangzhou, where property prices were relatively
stable before the macrocontrols, people are becoming more cautious about buying
a property.
GUANGZHOU: A middle-aged account manager for a public relations company in
Guangzhou, Liu Liye said he would have bought another apartment had it not been
for the State's late mortgage loan policy and the enactment of the eight rules
for stabilizing housing prices.
Having owned an apartment of some 90 square metres through the State's
housing reform practice in the late 1990s, Liu had been looking for a bigger
apartment.
"I had planned to buy an apartment downtown with a floor space of about 150
square metres within the first half of this year. But I changed my mind when I
learned of the State's policy change soon after Spring Festival," Liu told China
Daily.
"Why not just wait for more favourable bargains?"
Like Liu, a growing number of would-be house buyers in Guangzhou now have a
"wait-and-see" attitude towards property deals. Xie Xiaodan, deputy director of
the Guangzhou Land and House Administration, said the fall of prices and fewer
transactions in the past two months has much to do with such hesitation.
The official said April and May are usually a boom time for the real estate
market in Guangzhou.
Latest official statistics indicate property prices in the city's eight
districts downtown were 6,032 yuan (US$726.75) per square metre on average in
May, a fall of 93 yuan (US$11.20) from the 6,125 yuan (US$737.95) in April.
And the average April price fell 181 yuan (US$21.81) from the figure in
March.
The total space of houses sold in the eight urban districts was 556,900
square metres in May, down 2.64 per cent from the comparable period in 2004.
The total space of houses for sale was 690,200 square metres in May, down
10.08 per cent from a year ago.
Xie said the trend of lower prices and fewer sales will continue in the
coming couple of months.
He said more potential buyers are waiting for better prices while an
increasing number of property developers are reluctant to launch promotional
campaigns or place promotional ads.
He said prices will not rise or fall dramatically in the second half of this
year.
According to Ye Yan, vice-president of Paragon Group (Guangzhou) Ltd, one of
Guangzhou's strongest real estate developers, the "wait-and-see" period will not
last long, adding that properties will sell better later this year as long as
they are well-positioned and worth the price.
She said properties enjoying an excellent location and environment and those
with good indoor structures will be competitive even if the price is higher than
the average in Guangzhou. She based her viewpoint on the popularity of her
projects as well as on the fact that 84 per cent of Guangzhou citizens have
owned at least one apartment, and over 20 per cent of them have owned at least
two apartments. Therefore, she said, most local citizens will look for bigger
and better apartments.
She said 70 per cent of her company's Lido Hill apartments were sold the
first day they were put up for sale recently. The price reached 8100 yuan
(US$975.90) per square metre.
According to Cai Suisheng, secretary of Guangdong Real Estate Association,
the State's new property policies have also frustrated transactions in the
second-hand property market in Guangzhou.
The new policies have put an end to the practice of selling private houses
without paying business tax, and require owners who sell their houses within two
years of buying them to pay tax on the sale price.
Potential second-hand house buyers have likewise been
holding a "wait-and- see" attitude.
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