Low sales, statement put dent on Baoding housing boom hopes

The housing market of Bao-ding in North China's Hebei Province may not be rising as much as it appeared to be, with local home sales data on Monday not supporting claims of a housing boom propagated by local developers.

Data published on the website of Baoding Housing Markets Trading Center showed that 35 housing deals were inked on Monday, the last day of the Tomb-Sweeping holidays.

The sales figure was dwarfed by the massive number of 52,618 new existing homes for sale in the city's inventory.

Assuming Baoding could sell 1,500 homes per month, it would take the city 35 months to empty its inventory of existing homes, the Beijing Youth Daily reported on Monday.

In comparison, Ordos, a city which is well-known for its housing overcapacity in North China's Inner Mongolia Autonomous Region, has over 40,000 existing new homes in inventory, the city's mayor said at a meeting in March.

"There is an element of speculation in Baoding's home prices, with investors betting on a blueprint not officially approved by the central government. Developers, real estate agencies and investors probably worked behind the scenes to proliferate the news," Yi Peng, chief researcher on urbanization with Beijing-based think tank Pangoal, told the Global Times Monday.

"What set off Baoding's home prices is a notion and a strategic one, which means the benefits are more in the long term than in the short term," Chang Qing, a researcher from Beijing-based real estate agency Homelink, told the Global Times Monday.

As the excitement cools down, investors are expected to return to being cautious, Chang noted.

Expectations that the city's home prices can still maintain its upbeat climb was further dented by a statement by a top Beijing official last week, analysts said.

Guo Jinlong, secretary of the Beijing Municipal Committee of the Communist Party of China, said during an inspection tour on Thursday that as an "auxiliary center" of Beijing, Tongzhou district should fully tap its position as a bridgehead for the integrated development of Beijing, Tianjin Municipality and Hebei Province.

This statement goes against a widely circulated rumor, claiming that Baoding will act as the overburdened capital's auxiliary center, and has -exerted a subtle influence on home-buyers' sentiment.

President Xi Jinping called for integrated and coordinated development of the region around Beijing in February.