CRI听力: Contradicting Predictions on Future Property Market in China

A recent survey on the Beijing real estate market shows market expectations of property developers and home buyers are totally opposite from each other. More than 60 percent of the buyers indicate they will wait and see, while 60 percent of the developers think the housing price in 2010 will keep rising.

Let's take a closer look with reporter Liu Min.

 A recent survey from the China Index Research Institute shows about 40 percent of home buyers in Beijing expect a price decline in 2010. Sixty-two percent say they will watch the trend of the market without rushing to buy for now. This may indicate a price decrease in 2010. However, another series of data from the developers tells a totally different story.

Director of China Index Research Academy, Guan Yan:

"The overall market pressure rate on developers is 42 percent. The competitiveness pressure within the developers' circle is 43 percent,and the strategic pressure is 88 percent. These indicate an optimistic view towards the market trend and the estate industry in Beijing will carry out some expansion."

What concerns both speculators and home buyers the most is when the housing price starts to plunge. But Guan Yan says the data from the developers also suggests no price decrease recently.

"Our estimation is there hasn't been a price plunge in recent months, at least the first half of this year."

Currently the housing price in cities like Nanjing and Hangzhou is still rising, at a speed of one-thousand yuan per square meter more every week. But some real estate analysts believe the current evidence, which suggests a trend of price surging, is exactly a hidden drive causing the asset bubble to explode.

Cao Jianhai is from the Industrial Economy Research Center of Chinese Academy of Social Sciences.

"Those developers who bought a piece of plot at very high prices still need to loan from the bank. Let's say if they buy a plot with 26 thousand yuan per square meter of apartments to be built, then they have to sell it at more than 40-thousand per square meter to make an average profit. Even for those speculators, such prices will also be very risky. At the end of the game, if no one later continues to buy the property, then it would be a tragedy for those who happen to have the high priced property on their hands. Thus banks will also faceg threats."

Recently, the central government has called on 78 state-owned enterprises to stop investing in land purchase, which shows a stringent resolution to curb the overheated market price. But the contradicting views from the developers and the buyers give the 2010 property market an even more mysterious mask, provoking voices asking for a stricter policy to cool down the hot market.

For China Drive, I'm Liu Min.