Wait-and-see attitude dominates housing fair

The Pearl River Delta housing expo has kicked off in southern Chinese city of Guangzhou. It's the first large-scale housing fair following the implementation of the central government's new policies to cool the real estate market.

The housing fair in Guangzhou is dominated by a wait-and-see attitude. Potential home buyers are hoping the sky-high housing prices will go down under the tighter policies.

A potential home buyer said, "I can tell you that most buyers are hesitating. I came here just to look around. But from my point of view developers are not positive. They have scaled back the number of buildings they are showcasing at the fair."

Developers are waiting for market reaction before taking further measures.

Only a few are offering discounts at the fair. Some are even avoiding mentioning prices in order to gauge the market response.

A property developer said, "Right now, we have drawn back some discounts. Developers may have been affected by the new policies more or less. But we are all waiting to see how the situation will develop in the coming months."

The upcoming May Day holiday is the traditional peak season for the housing market in the Pearl River Delta. The market performance during this period usually sets a basic tone for overall industry in the first half. It also acts as an indication for the whole year's trend. Therefore, many insiders see the housing fair as a barometer of the region's property market this year.

Han Shitong, Property Expert said, "The situation right now is that housing prices remain at high levels, and no one makes a purchase. I think the stalemate will increase in the future."

Guangdong's property development has expanded rapidly since the beginning of this year. Figures show that in the first quarter, areas of newly-built commercial housing increased 127 percent from a year earlier. But transaction areas of commercial housing only grew 14 percent.

Insiders say this indicates an abundant supply in the coming months and developers will face great sales pressures. They are suggesting developers provide more small and medium sized housing with lower prices to meet first-time home buyers. Developers should also speed up sales to boost the transaction volume in May in order to lay out the foundation for the whole year's performance.