Stabilization of property market continues in January: Chinese think tank

Updated 2017-02-16 14:24:50 CGTN

China managed to cool down the country's overheating property market thanks to measures aimed at putting a brake on the skyrocketing prices, indicated a report published on Thursday by the Chinese Academy of Social Science (CASS), a public research institution.

However, unwillingness from certain developers to abide by the policies still poses potential threats.

Sixteen out of 30 surveyed cities across the country have seen their housing prices sliding or "stopping the climb" in January, the CASS's Big Data Housing Prices Index noted in its January edition.

Fourteen cities managed to decelerate the house price growth.

The overheated market has been cooling down, said Zou Linhua of the CASS, who headed the compilation of the index.

The latest data from the National Bureau of Statistics (NBS), which monitors housing prices in 70 large- and medium-sized cities nationwide, showed that 46 cities had seen prices for new residential homes climb on monthly basis in December 2016, down from 55 in November and 62 in October.

The NBS had called the stabilization a "positive change."

The Chinese government resorted to strict regulations entering the second half of 2016 in an effort to tackle the red-hot housing market, reversing from previous encouraging policies which aimed at cutting inventories.

Measures included higher down payments, restrictions on home purchases and stricter criteria for potential second homeowners, as well as attempts to rein in mortgages.

The real estate tax, which could increase the cost of holding a house, is still under trial.

But concerns have not been completely dispelled, and fears that housing prices may just be temporarily in check only are not unjustified.

The momentum to push housing prices up in some big cities remains strong, said Yan Yuejin, a senior researcher at housing consultancy, E-house China.

The Chinese government should be "active" in implementing the regulations it introduced, Yan advised.

A survey carried out by Reuters of 10 major Chinese real estate developers, released earlier this week, revealed that most of the firms contacted "shrugged off" tightening measures while seeking to expand their market share by increasing land investment in 2017.

"Eight of them said they were increasing their budgets, by between 10-50 percent, and the other two said they would sustain their spending at 2016 levels," the news agency reported.

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