Govt to Stay the Course on Housing Despite Problems
07/14/2010 source: Global Times
The government’s denial of recent reports that policies to control housing prices may be loosened dampened market sentiment Tuesday.
Commercial banks should strictly implement existing regulations on loans to multi-home buyers, the China Banking Regulatory Commission said Monday. And the Ministry of Housing and Urban-Rural Development urged to continue implementing curbs on home loans to rein in speculative home buying.
The Stated-owned Assets Supervision and Administration Commission of the State Council also denied rumors Monday that it had given the green light to enterprises under its control to buy land.
The property sector dipped on these announcements Tuesday, leading the key Shang-hai Composite Index to fall 1.62 percent to close at 2450.3 Tuesday.
There won’t be an immediate loosening of policies on the property sector, given the government’s efforts are just beginning to bear fruit, Wang Tao, head of China Research at USSecurities, told the Global Times.
Average home prices in 70 large- and medium-sized cities fell 0.1 percent in June compared to May, the first drop in 16 months, the National Bureau of Statistics said Monday.
The sales of high-end residential property also began to decline in most of the 15 major cities including Beijing in the first half of the year, their prices remain high, said a research report released Tuesday by CB Richard Ellis Group (CBRE), a global real estate services firm.
The property policies have not started to affect developers’ capital flows yet, said Ma Xueming, senior director of CBRE Research. Once that happens, and it should in the second half of the year, there will be a drop in prices, he added.
There might also be a slowdown in property construction and housing starts in the coming months, Wang said.
The government will not back off its policies until the end of the year at the earliest, she predicted.
