Source: CCTV.com

10-28-2008 10:58

Special Report:   House Market under New Policy

Beijing's property prices in September went down for the first time since 2005. Potential homebuyers continue to wait for lower prices, and that is devastating the property market. Experts say developers may choose to offer more discounts across the city, dragging overall prices down even further.

Experts say developers may choose to offer more  discounts across the city, dragging overall prices down even further.

Despite several favorable measures released by the central government, as well as the promotional discounts continuously being offered by developers, many potential homebuyers around the country are still hesitant about taking the plunge.

In Beijing, some buildings have offered exceptional discounts of as much as 40 percent, in the hopes of boosting sales.

Xu Hong, Board Chairman of Beijing Huaye Real Estate Co. said "Considering the increasing uncertainties in the future property market, plus the fact that we have to ensure smooth capital flows, we have no choice but to cut prices right now."

But insiders say discounted housing actually accounts for less than 5 percent of all homes on sale. And the units being sold at exceptional discounts are usually large homes. So even though their price per square meter has been drastically cut, total prices are still far beyond many people's expectations and means.

In fact, most buildings in Beijing have offered small discounts, between 1 to 10 percent off. Obviously, such low discounts are unappealing for potential buyers.

One potential buyer said "I'm not in a hurry to buy one. I'll wait and see."

Official figures show Beijing's commercial housing supply has exceeded market demand for several months. Insiders say the downturn in the city's housing prices may continue for a while.

Li Wenjie, Vice Chairman of Beijing Real Estate Agents Assoc. said "Based on the current market situation, the pervasive promotions will spread at the end of this year. More discounts may be offered. The all-around adjustments may pull prices back to 2006 levels, maybe even 2005 levels. This is in accordance with local economic developments and people's purchasing power."

The global economic movements, macro-control policies and market participation are all influencing the property market right now. And insiders say it will take a while for any new policies to have their intended effect and change the mindsets of potential homebuyers.

 

Editor:Xiong Qu