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Most consumers think the government's measures to cool down the real estate market are the right ones to take, and believe house prices will increase moderately in the future, according to a survey released yesterday by the National Bureau of Statistics of China (NBS).
The survey covered 2,132 people of various incomes in 35 cities.
About 25 percent of the sampled people thought the government's policies were timely and had a clear aim. About 49 percent thought the policies could work but it depended on how they were implemented, while about 6 percent thought it was hard to carry out the policies. The rest of those asked had no opinion.
About 20.8 percent of those questioned believed house prices would keep rising rapidly. Another 48.7 percent believed house prices would increase but thought the increase rate would be slower and house prices would become stable gradually.
Only 11 percent of those interviewed thought house prices would fall.
"I do not think house prices will fall in the near future in Beijing," said Wang Dan, a 27-year-old man working in an IT company in Beijing.
He bought an apartment on the southeastern second ring road last month for 8,400 yuan (US$1,016) per square meter.
The series of measures taken by the government have made many potential house buyers change their minds. Of the 2,132 surveyed, about 39 percent have adjusted their plans. Most of them postponed buying a home, 16 percent quickened the process, and 8 percent gave up their plans.
"I will buy a house when the market becomes more stable," said Lei Xiaorong, a 25-year-old woman working from a securities company in Beijing.
Meanwhile, about 77 percent of the interviewees thought it was necessary for the local government to firmly implement the central government's real estate policies. Only 7 percent thought the government should not interfere with the development of real estate because the market has its own principles.
Market insiders say local governments have a direct interest in the real estate market because land sales and property tax are their main sources of income.
On the other hand, experts suggest setting up a national property information system to help buyers and developers make good decisions.
China has no national information platform for house buyers to know market data such as available projects, house prices and turnover volume, said Zhang Yan, a real estate analyst in China Securities.
In Shanghai, an information system is well established but in Beijing, there is no such thing, she said.
The central government has come up with many measures to curb runaway house prices especially in the Yangtze River Delta cities such as Shanghai and Hangzhou.
On March 17, the central bank asked commercial lenders to increase interest on housing loans by 20 basis points. Downpayments in areas where property prices have rocketed were also raised to 30 percent of the asking price, up from the previous 20 percent.
From June 1, housing units sold within 2 years of ownership will be subject to a 5 percent business tax on the selling price. If a house is owned for more than two years and then sold, a 5 percent tax will be charged on the difference between the buying and selling price.
(China Daily July 13, 2005)
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