According to China Watch Blog, industry experts said at a forum on Monday that China's property prices will stabilize in the second quarter of this year due to the government's tightening of real estate policies and attempt to improve imbalances between supply and demand. That's good news, but others are worried about what this means to property prices.
"In cities that have experienced excessive property price growth, there will be bigger fluctuations in the following three months, but the decrease will differ from city to city," says Nie Meisheng, president of China Real Estate Chamber of Commerce.
However, experts are worried that tightening policies may deter property developers from starting new projects and purchasing land, thereby cutting the supply and pushing up prices next year.
Both central and local governments have launched a string of measures to curb soaring property prices and investment-oriented home purchases, such as raising down-payments and mortgage rates for second and third homes, and even restricting the number of apartments a family can purchase, People's Daily reported.
Those measures instantly chilled the property market in key cities, with transactions and prices falling. Statistics from the China Index Academy show that among the 35 major cities it monitors, 26 cities saw transactions dip last week, with an average fall of more than 20 percent.
The average price of home deals in the southern city of Shenzhen was 19,271 yuan ($2,823) per square metre, down 25.44% from the previous week, leading to the biggest drop among 35 cities.
Beijing was down 18% to 15,707 yuan per sq m, and Shanghai was down 12.2% to 13,246 yuan per sq m. Hangzhou, capital of East China's Zhejiang province, however, reported a 49.2% increase in transactions and 25% growth in price, with the average price reaching 25,409 yuan last week.
Let's wait and see what happens in the next few months.
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