Money

Housing prices are still through the roof

(China Daily)
Updated: 2010-04-15 08:24

More than 60 percent of people selling their homes say they plan to use the proceeds to buy another property, according to a report by Centaline property agency.

The study, which was based on a survey of 800 homeowners taken between March 20 and April 10, showed 18.5 percent planned to leave the property market because they felt it had reached its highest point.

Nearly 10 percent said they were selling because they needed the money.

And 8.4 percent said they hoped to use the proceeds to invest in other industries.

"I wouldn't sell my home if I had not set my mind on buying another two apartments," said the owner of a 96-sq-m apartment in Guomei City, which is near East Fourth Ring Road.

"After subway Line 6 opens, the housing price will definitely rise again."

The property owner, surnamed Wang, sold the home for 2.8 million yuan.

Among the respondents, more than 90 percent thought the cost of housing was exceptionally high, but 60 percent still felt it would rise another 15 percent.

Since the end of 2009, the Chinese government has rolled out a series of regulations and measures - including increasing down payments for buyers of second homes and raising mortgage interest rates - aimed at curbing rising house prices. Despite the efforts, the cost of real estate has continued to rise.

The average cost of a second-hand home reached 15,692 yuan per sq m in March, a rise of 1,732 yuan since February, said an official from the Beijing Municipal Bureau of Statistics on Wednesday.

A total of 20,556 apartments were sold in the first quarter, an increase of 15 percent compared to the same time last year.

Among them, 13,268 apartments were sold in March, which was up 40 percent compared to the same period a year earlier.

"It is very irrational to purchase houses right now because of the high housing prices," said Feng Ke, director of the Research Center of Financial Properties at Peking University.

"I don't think the skyrocketing prices have anything to do with the government's measures," he said. "It is the vast demand that has led to the development of the second-hand market."

METRO