New property projects seen easing demand this fall
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There will be enough housing available in the second half of the year, said an official from the housing ministry over the weekend, a prediction that, if true, could mean prices will finally begin to fall.
"More houses are going on the market and there should be a major shift as supply and demand come back into balance," said Qin Hong, deputy director from the policy research center with the Ministry of Housing and Urban-Rural Development.
Qin said that developers will open up many new projects this fall and winter.
"The properties that were supposed to start being sold between May and August have been delayed due to the government's policies," said Qin at a forum in Beijing.
From January to July, housing investment and new construction areas reached 2.4 trillion yuan ($353.00 billion) and 920 million square meters, up 37.2 percent and 67.7 percent year-on-year, both record figures.
Commercial housing under construction hit 2.5 billion square meters, or the whole area of last year, and housing area supply growth in 103 cities has been more than 100 percent, said Qin.
Ren Zhiqiang, chairman of the Huayuan Property Corporation, said in a forum last Wednesday that the growth in housing supply will take effect starting in September.
"The housing being stockpiled totals 160 million square meters currently. The figure could hit 190 million later this year," said Ren.
"The oversupply will make the housing price decline, but the amount of the drop depends more on the buyers' intentions and other factors such as location," said Shang Jiaowei, a researcher from the Institute for Urban & Environmental Studies at the Chinese Academy of Social Sciences.
"In fact, housing prices have declined since measures were taken to cool the market in April," added Shang.
Standard Chartered predicted in July that the housing prices in the third quarter would see a decline due to rising supply and buyers' reluctance to jump into the market now.
Standard Chartered predicted that prices in first-tier cities would decline by 20 to 30 percent in the second half of this year, and by 10 to 20 percent for the second-tier cities.
But the government will play a major role in deciding whether housing prices fall, said Yin Bocheng, head of the Fudan University Real Estate Research Center.
"No one knows how policies will be implemented."
