Top Biz News
High-flying housing getting out of reach
By Wang Ying (China Daily)
Updated: 2009-12-08 07:55
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Potential apartment buyers in Hangzhou, capital of Zhejiang province, line up the night before an apartment complex opens for sale. With soaring housing prices, it is the second instance of locals forcing a developer to sell apartments as early as possible. [China Daily] |
Thirty-year-old Liang Changhong has wanted to buy a two-bedroom apartment in Shanghai for years but, with his wedding approaching, he thinks the soaring price of housing is getting beyond his reach.
"It has never been so difficult," said Liang, who went to a housing trade show in the hopes of finding a good deal. "I have missed my chance to get a home at a reasonable price. And now, if I take on something I can't really afford, I face decades of hard work trying to pay the mortgage."
Liang, an office worker at a foreign manufacturing company, said many sellers at the trade fair were reluctant to reveal homes' selling prices.
"Few booths shared the prices," he said. "Maybe they want to be able to charge people more, if they get the right customer."
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Rumors that the state banking regulator will call an end to the favorable mortgage policy next year have driven homebuyers into the housing market.
Figures from the National Bureau of Statistics of China (NBS) show that the average housing price in 70 major cities rose by 3.9 percent in October compared to the same period 2008. It was the sharpest monthly growth for 14 months.
"Currently, the housing supply in Shanghai can only satisfy demand for less than two months," said Chen Sheng, director of the China Index Academy. "As a result, property developers want to sell their remaining houses at a higher price, and buyers are keen to buy one before the price rockets again."
According to housing consultancy E-House (China) Holdings Ltd, the average home in Shanghai shot up from 12,140 yuan per sq m in February to 16,780 yuan in October - a rise of 38.22 percent.
The China Index Academy says things were no better in Beijing. Homes there reached a record high of 17,509 yuan per sq m, up 9.74 percent month-on-month.
Meanwhile, there are fewer homes available. Total floor space on the market fell by 30.3 percent on a yearly basis to 13.6 million sq m at the end of November, the smallest quantity since 2008.
The record low supply led to panic-buying.
In Hangzhou, Zhejiang province, almost 1,000 people queued for an entire day for a chance to buy one of 600 remotely located apartments in a new subdivision on the outskirts of the city. The development sold out immediately.
During an online forum, He Qian, former deputy director of the NBS, said the property market was "at an abnormal state" this year, and said housing prices were rising out of proportion.
Between January and October, 10 trillion yuan worth of consumer goods were sold, nearly half of which were the result of housing purchases, said Gu Yunchang, deputy head of the China Real Estate and Housing Research Association.
"That shows the housing market is still a support to the national economy recovery," Gu said.
In the first 10 months, both new housing and previously owned housing totaled 6 trillion yuan, Gu said.
Teng Tai, managing director of China Galaxy Securities Co, Ltd, said the fast-rising price of real estate leaves the government in a quandary.
On one hand, it would like to see a flourishing real estate market and enjoy the boost it will give GDP growth. On the other, the government would like to see stability, Teng said.
"An ideal solution for the government would be to pump more land supply into the market and to construct more government-subsidized housing and low-rent housing for low-income families."
Hu Yuanyuan contributed to the story.
