Gov't move dampens price hikes of suburban homes
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Property prices in some of Beijing's far suburbs, where home costs have seen some of the wildest upward swings, are cooling.
The softening prices followed the State Council's introduction of policies aimed at containing surging home prices. Many customers have decided to postpone their purchases, real estate agents say.
The policies, issued Saturday by the State Council, include stricter criteria - including bigger down payment requirements - to buy a second or third apartment.
Other restrictions impact non-locals who intend to buy properties for investment.
"Now people's intention to buy a secondhand apartment in Tongzhou has dropped to only 5 percent of the previous level before April 15," said Zhang Dawei, director of the research department at Centaline Property Agency Ltd. According to the statistics from Centaline's research center, 80 percent of property sellers said they will not raise the prices of their properties, while 50 percent said they were even willing to reduce prices.
Housing dealers affirmed the statistics. A dealer surnamed Jia said in an interview with Beijing Daily that fewer customers came to him after the policies came out.
"Previously, many customers paid deposits right after they were shown around the house, but now most are just here to ask questions about houses," Jia said.
Chen Xiaoshu bought a 50 sq m apartment in the Hebei province city of Yanjiao, near Beijing, in April 2009.
At that time, the price was 4,000 yuan per sq m.
Similar apartments are now valued at 11,000 to 13,000 yuan per sq m.
"Many of my friends thought it was a good investment to buy houses here, especially after they witnessed the value of my apartment triple in one year," Chen said.
"But now most of them have begun to hesitate because the policies from the State Council make the future of housing investment uncertain."
The prices of many properties in Yanjiao have since declined. The average price of a newly built property in the Xinghehaoyue development was reduced to 4,668 yuan per sq m from 4,999 yuan per sq m at the beginning of this week.
Meilinwan, another development in Yanjiao, also reduced its price to 4,800 from 5,100 yuan per sq m.
Property prices in Tongzhou are going through a similar freeze. The Qingshuiwan development two weeks ago offered prices of 24,000 to 29,000 yuan per sq m; its dealer now offers a 15 percent discount on cash purchases.
"The housing prices in suburban areas are major targets of many speculators, so once policies get stricter, they are among the first to suffer," said Chen Baocun, deputy secretary-general of the National Real Estate Manager Alliance.
Chen estimated that the effects of the policy will peak after three months, at the end of July.
"I guess the prices will drop until they reach the levels at the end of 2009," Chen added.
