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Specifics of Beijing's new property measures

02-16-2011 20:19 BJT

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ZY: For more details about Beijing's new measures to bring down property prices, we're now joined by my colleague Zhang Nini. Good evening, Nini. What are the specifics?

NiNi: They're familiar to the ones released last month to the whole nation, including that the down payment should be no less than 60% when the family buys a second apartment. The country will increase the number of houses for more low-income families.

Let's look at the restrictions people face if they buy a second or third house in Beijing. The regulation says that local families are allowed to buy another apartment if they've already owned one. And for the families from other cities, if they don't own any residence in Beijing, and are able to provide a more than five years' tax payment certificate, they can buy one house.

The local Beijing families who own two or more houses, families from other places and own one or more houses, are restricted from buying any other houses.

ZY: How is the market responding to the new set of measures?

NiNi: As the measures have just been released, it's still too early to get a clear picture. However, according to statistics, the total transaction volume has seen a 60% drop from over ten thousand homes to slightly over four thousand in the past four weeks.

The business slump resulted partly from the holiday effect, but is also a direct result of the measures released by the State Council in late January. Government efforts to rein in rocketing home prices and the money tightening measures from the central bank is making many potential buyers put off plans and are waiting to see in the hope of prices reducing.

Beijing is among the hardest hit by the new measures. And many believe that efforts to curb speculation will have a negative impact on property prices. Centaline Group, a Hong Kong based real estate agency, have conducted a survey among one thousand potential home buyers recently, and 27 percent thought that the property prices will fall by 20 percent after the implementation of new measures. However analysts also say there is ample liquidity in the market, the property prices may not fall right away.

As the policies become stricter in big cities like Beijing, Chinese developers are looking elsewhere to make their fortune. Second and third tier cities, with tremendous unmet demand for modern housing and rising income, will remain the growth engine for developers in 2011.

 

Editor:Zheng Limin |Source: CNTV.CN

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