Sharp price rise seen in largest cities; speculation blamed
The domestic real estate market saw a boom in first-tier cities in the weeks after the Spring Festival holidays, and this has caused the government to step up efforts to roll out measures to tighten the market, media reports said Monday.
The sharp rise in housing prices was caused by a slew of stimulus policies released recently to support the sector, as well as speculation triggered by property developers, agents and public opinion, which led to people rushing to buy homes, the Beijing-based Economic Information Daily reported Monday, citing experts' opinions.
The recent heated situation in the Shanghai property market was due to the fact that "some estate agencies persuaded uninformed homebuyers to hurry to start the house-buying procedure," read a statement released Sunday night by the Shanghai Municipal Commission of Housing and Urban-Rural Development.
The statement said that Shanghai will regulate the property market and punish estate agencies that spread false information.
The Shanghai government supports local people's desire to buy houses to live in themselves, but it will try to curb the buying of homes for the sake of investment, the statement said, noting that policies for limiting home purchases will be strictly applied in order to secure the sound development of the city's property market.
Abnormal trend
The trade volume of new homes in Shanghai rose sharply to 234,655 square meters from February 19 to 25, an increase of 144 percent over the week before, domestic news portal finance.sina.com.cn reported Monday, citing data from property consultancy CRIC.
One project in Shanghai, whose average price was 80,000 yuan ($12,220) per square meter, sold all of its 352 apartments on the first day of sales, media reports said Monday.
This is not a normal trend, as the housing prices in first-tier cities are far higher than people with average incomes can afford, and it is not sustainable, said Hui Jianqiang, research director with real estate information provider Beijing Zhongfangyanxie Technology Service.
The main reason for the boom is that property is seen as a safe investment amid the current sluggish economic environment in the country, and "speculation by property developers and agents has also fueled the trend," Hui told the Global Times on Monday.
Reducing inventories of unsold property will still be the main target in third- and fourth-tier cities, but in first- and second-tier cities, government policies will be rolled out in the near future to tighten up on the property market, he noted.
According to data released by the National Bureau of Statistics (NBS) on Friday, among 70 major cities in the country, first-tier cities like Shanghai and Shenzhen in South China's Guangdong Province reported large rises in home prices in January on a monthly basis, as did some second-tier cities such as Nanjing, capital of East China's Jiangsu Province, Hefei, capital of East China's Anhui Province, and Xiamen in East China's Fujian Province.
The price for new homes and secondhand homes in Shenzhen rose by around 50 percent in January on a yearly basis, the NBS said.
"Most of the homes sold in January in Shenzhen are luxury apartments and the price reached more than 100,000 yuan per square meter," a white-collar worker surnamed Wu in Shenzhen said Monday. Wu bought a new apartment in Luohu district three months ago.
"The price for an apartment in my neighborhood rose more than 10,000 yuan per square meter in February," he told the Global Times.
More stable in Beijing, Guangzhou
According to the NBS data, the price rise in Beijing and Guangzhou has been more stable than in Shanghai and Shenzhen.
This is because Guangzhou covers a large area and has a comparatively mature property market, said Hui, the property expert. He also noted that Guangzhou's neighbor Shenzhen has a lack of housing supply, which is one reason for the high prices in its housing market.
The real estate market in Beijing has also seen its secondhand home market warming up, a property agent surnamed Wang in Chaoyang district in Beijing told the Global Times on Monday.
"The average secondhand home price approached 40,619 yuan per square meter in Beijing in January, up 2.84 percent over the prior month, and the price of secondhand homes in Jintai Road near the CBD area in Chaoyang district has risen by about 3,000 yuan per square meter in recent weeks after the Spring Festival holidays," Wang noted.
