Housing sales may rebound in 2013

Hu Jinghui, vice president of 5i5j Real Estate, said that although China's restrictive policies have helped contain speculation, robust demand from first-time home buyers will continue to push up sales.

China is undergoing rapid urbanization. Its urban population outnumbered that of rural areas at the end of last year, an increase that is expected to give momentum to urban property markets as new settlers seek accommodation in cities.

Demand was temporarily suppressed over the last two years, as the malaise in the market brought about by stringent government controls was believed to have deterred many potential buyers.

Buyers began to rush into the market in November, however, as they feared an upturn in prices would soon materialize due to an absence of tougher control measures and credit policies, which many say are signs of loosening government controls, Zhang said.

"The government has mostly been reiterating (existing control measures) this year without taking further action to tame the market," Zhang said. "A string of signs like this is buoying the market."

This week, Chinese real estate developers' share prices surged on official remarks that China would "actively and steadily" push forward urbanization in 2013.

Hu said housing sales and prices nationwide will likely continue to rise in 2013, although a dramatic surge is unlikely. He added that the pace of recovery will be quicker in big cities like Beijing and Shanghai.

Experts have urged the government to stick to existing property controls and pass new regulations to offset the impact caused by the warming of property market.

"China's property controls are still in a crucial stage. It's important that the government show resolution in its efforts to curb price hikes," Zhang said.

The government has said it will stick to its property market controls next year while building millions of affordable housing units to divert demand.

 

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