CRI听力:Property Transaction Volume Declines In Reaction to Government New Policy

Anchor: Government measures to cool the country's overheating property market are showing their effects. Transaction volume in major Chinese cities has decreased substantially due to mortgage limitations on non first-home purchasers, while still more new regulatory measures are on the way. Damin has more.



Market activities sank to nearly a standstill in May. Sales of commercial houses in the capital city of Beijing were a little over 3,300 sets, only a third as many as the same period last year, and a nearly 60 percent drop from the previous month. In the buy-to-let market, only 13,000 properties changed hands. That's half the volume of the previous month. In the eastern economic hub of Shanghai, only 300,000 square meters of commercial housing area were sold, a decline of 70 percent from the previous month. Housing sales by area also dipped in the southern city of Guangzhou.

Vice President of the China Real Estate and Housing Research Association Gu Yunchang says the decline is evidence that the government's recent measures targeting the overheating property market have taken effect.

"I should say the effects of the recent policies are very obvious. Markets responded quickly. At the moment, the market is in a phase of looking on, and the government is also waiting. This round of readjustment measures has been markedly different from previous ones. They set out from both the demand and supply sides, whereas previous ones only focused on the demand side. I very much support the present measures."

Since April, the government has issued a series of policy guidelines. It has raised the downpayment levels and mortgage interest rates for second-home buyers, allowing banks to refuse mortgage loans to those buying third houses. Local authorities in some cities with red-hot property markets have put in place measures to stop selling houses to those who haven't paid local taxes in one year, among other policies.

Despite the sharp decline in transaction volume, housing prices remain relatively high in major cities, holding steady at about 20,000 yuan per square meter, about 3,000 U.S. dollars. Both buyers and sellers are watching for clues as to the future of the market.

An anonymous real estate agency employee in the southern city of Guangzhou says buyers are being particularly cautious now.

"In the past, we could strike a purchase deal after receiving ten inquirers on average. Now it will take at least 30 inquirers before we can get one deal sealed. Potential buyers are waiting."

A Guangzhou resident surnamed Zhang says he plans to buy a house, but not now.

"I'll wait another six months to see if any other policy measures come out before I let go of my money and buy a house."

Chairwoman of the Real Estate Association of the All-China Federation of Industry and Commerce Nie Meisheng agrees that government policies have effectively held back housing prices. But she emphasizes that as the government strikes out at housing speculation, it should also ensure balance in its market regulations.

"By the latter half of the year, when a lot of buy-to-let investors and property developers quit the property market, then we'll have reached the balancing point. I hope then the macro control measures will have a soft landing."

Most industry insiders hope the government will make increasing the supply of affordable housing for low-income groups a priority. In the meantime, the government should guide private capital into other economic sectors.

Vice President of the China Real Estate and Housing Research Association Gu Yunchang says,

"What's the solution for the low- and medium-income families? It's low-rent housing, affordable housing and pubic rental housing. Now that the Ministry of Housing and Rural and Urban Development has stressed it will substantially develop public rental housing, I think the next thing is how it's being carried out. Then the government also has to find investment outlets for the high-income families to spend their money on."

Gu Yunchang says he supports the State Council's recent 36 measures to encourage private capital investment into different sectors and hopes the policy can be carried out effectively.

In the meantime, different local administrations, such as the Chongqing Municipality, Zhejiang Province and cities such as Beijing and Guangzhou are also adopting local measures to regulate the property market. Among the strictest is Beijing's highly specific move to limit to one the number of new house purchases per Beijing family. The measure is believed to be even more effective than the usual monetary or fiscal policies in curbing speculative activities.

Most recently, the government has been contemplating a property tax as a further means of regulating the property market toward healthy development, a measure widely seen as another strike against property speculation. Experts hope these measures combined will bring the property market back toward healthy development.

For CRI, I'm Damin.