Real estate market showing signs of recovery

After having cooled down in recent months, the real estate market in China is showing signs of recovery, due to pent-up demand, encouraging measures by local governments and easing macroeconomic policy, analysts said yesterday.

"Buyers who need apartments for their own use and who have been waiting for the right time to purchase since last year have started buying, as many real estate developers have cut house prices by 10 to 20 percent over the past few months," said Yin Bocheng, director of the real estate research center at Shanghai-based Fudan University.

According to data released by China Index Academy on Monday, among 40 monitored major cities in China, 24 of them witnessed a recovery in transaction volume from May 7-13, with some cities like Suzhou, Xiamen and Wenzhou even registering a year-on-year growth of 100 percent.

Data released by Centaline China Property Research on Monday also showed that sales of newly built apartments surged by an average of 44 percent month-on-month in 54 large and medium-sized cities for the first 10 days of May.

Weighed down by factors such as a slowing economy, tightening credit and purchase restriction policies, sales and prices of apartments plunged in the first quarter of this year in China. According to data released in March by the National Bureau of Statistics, the traded area of commercial and residential housing nationwide dropped 14 percent year-on-year and the transaction value fell 20.9 percent during the first two months of this year.

With this background, many real estate developers cut trading prices by 10 to 20 percent to increase sales. This "attracted buyers who have taken a wait-and-see attitude since the end of last year to take action," Yin said.

Some local governments also "fine-tuned their housing policies in April, making it easier for home buyers to get mortgages," said Yang Hongxu, research director with Shanghai-based E-House Real Estate Institute.

Last month, several second- and third-tier cities, including Wuhan and Nanchang, raised the upper limits for housing loans, and lowered the down payment ratio requirement.

In the wake of April economic data showing that the economy was performing worse than expected, the central government announced Saturday a cut in the bank reserve requirement ratio by 50 basis points.

"It will benefit the real estate market as it can increase liquidity and make access to capital easier," Yin said.

Source: http://english.peopledaily.com.cn/90778/7818043.html