After seven government departments issued a joint circular this
month in an attempt to stabilize housing prices, Shanghai and
Hangzhou, the cities that experienced the most dramatic price
hikes, have seen prices tumble by more than five percent.
But not so in Beijing. The per-square-meter sales price in a
recent Beijing housing exhibition averaged 9,512 yuan (US$1,146).
In 2004, the average was 5,005 yuan (US$604.724) per square meter,
according to figures from the Beijing Municipality.
Beijing's housing prices are unlikely to be affected greatly by
the new policy, said Yang Qing, board secretary of the Beijing Real
Estate Development Company.
"Rates of increase might slow down, but housing prices will not
drop in the near future," said Yang.
Many new houses are still being sold like hot cakes in Beijing,
Yang said.
According to the new policy, owners of private property who sell
after less than two years after purchase must pay business taxes
calculated according to the sale price. The policy also states that
local real estate administration departments must demand
information on price levels and housing sizes before developers are
granted permission for land use, using reducing construction costs
for affordable housing and restricting developers' profits to three
percent as guidelines.
Yang and other insiders attributed the maintenance of Beijing's
increasing housing prices to the huge demand for real estate
products, as well as a supply shortage.
In the first four months of this year, only 7.3 million square
meters of land for housing development was made available on the
market, a 30 percent decrease from the same period last year, said
Duan Meiyan, general manager of the Beijing Dadi Real Estate
Consulting Company.
Beijing is home to the country's largest number of civil
servants, foreign-related agency staff, white-collar workers,
college professors, researchers and artists in the country. This
has led to the enormous demand for new houses and corresponding
price hikes, said Professor Dong Fan with the Beijing Normal
University.
Compared with Shanghai, Beijing's housing prices have been
stable for a long time. The city has also had much less of a
problem with real estate speculation, said Professor Lin Zengjie
with the Remin
University of China.
In Shanghai, the average per square meter price in urban and
suburban areas exceeded 10,000 yuan (US$1,207.7) in 2004. Prices of
some residential apartments also increased 20 percent in a matter
of months. By comparison, housing prices in Beijing stood
relatively firm at about 5,000 yuan per square meter last year.
Lin also attributed the property price hikes in Beijing to the
high rates of profit claimed by real estate developers, which
averages 15 percent. In some other countries, profits are
restricted to 5 percent, Lin said.
Despite macro-control measures by the central government, real
estate pundits are still some of the richest persons in the
country.
Ninety-four of the 500 richest people in China are in the real
estate business, according to the Guangdong-based New
Fortune magazine.
Although China has implemented a new policy to stabilize housing
prices, the country's housing prices are still expected to grow 5
to 8 percent this year, and Beijing's growth rate might exceed 8
percent, Professor Dong said.
(Xinhua News Agency May 26, 2005)