Expert: Property market quite stable

The rebound of China's real estate market has caught many by surprise. Many major cities in the country have witnessed the sale of what are referred to as "land champions." These are plots of land whose estimated floor prices are even higher than finished property prices in neighboring residential complexes. Why are housing developers so confident in next year's market.

The secretary general of the China Real Estate Industry Association, Gu Yunchang, says in the second half of 2009, the housing market has been stable. There have been no worries over possible policy changes among housing developers and home buyers.

Gu Yunchang, Secretary General of China Real Estate Industry Assoc. said "Because of the macro-economic outlook and the property market momentum, I have not seen any price drops recently. The price has been stable or risen a little."

As 2010 draws closer, Gu says it is very unlikely that housing prices will drop. Citing figures from the National Statistics Bureau, Gu said in the first ten months this year, 1 billion square meters of commercial housing were sold while only a third of this number worth of new housing was built. The huge gap between supply and demand will drive the market up further in 2010.

Gu says in order to keep the housing price stable, the government should keep the moderately loose housing loan policy and expand housing supply.

Gu Yunchang said "I do not advise any changes in the current housing loan policy. It's a good policy and should be kept. I suggest more work should be done on expanding housing supply. More supervision should be put in place to stop developers from stocking up on land and not developing it."

There have been numerous cases of hoarding land in China. These cases are defined by the deliberate delay of construction by more than 2 years after winning a land bid.