House prices in Beijing surged around 1,000 yuan (US$124.3) per
square meter in the first two months of this year, up 17.3 percent
from the same period last year, according to the Beijing
Construction Committee.
The rise took place despite the central government's efforts to
curb mounting house prices in major Chinese cities.
According to a report of the committee, house prices averaged
6,776 yuan (US$842.8) per square meter. The prices are much higher
than many people can afford as per capita income of the city was
17,653 yuan (US$2,195.6) last year,
Zhang Jin, 26, who works for a private company in Beijing with a
monthly salary of about 5,000 yuan (US$621.8), said he feels a lot
of pressure to buy his own house.
"A 100-square-meter apartment would cost me at least 15 years of
accumulated earnings based on my current income," Zhang said.
However, experts predicted house prices in major cities like
Beijing, Shanghai and Hangzhou would continue to rise.
"House prices in Beijing will rise steadily this year," Zhai
Lujing, a researcher at the Beijing Urban Construction Research
Center, told China Daily.
Zhai's center is responsible for doing the annual research
report on the city's real estate market for the Beijing
Construction Committee.
"But rises will be smaller than last year thanks to tight
government policies in the real estate market," she said.
The price for ordinary residences averaged 6,721 yuan (US$836)
per square meter in Beijing last year, according to a report made
by Zhai's center early this year.
Speculation by real estate developers in connivance with some
local governments has helped house prices to keep rising, according
to Zhang Qunqun, a researcher from the Chinese Academy of Social
Sciences.
To curb speculation and rein in the red-hot sector, the
government introduced stricter taxation policies last year and
tightened land supplies.
The government began levying a 5 percent business tax last June
on the full amount received from selling a home if that home was
sold within two years of being purchased.
The central bank also ended a preferential policy for mortgages,
raising the interest rate on such loans with terms of more than
five years by 20 basis points to 5.51 percent.
Hoping government policies could bring down surging prices, many
people have a wait-and-see attitude on whether to buy a house
now.
"I want to wait two or three years," Zhang said. "Maybe prices
might drop a little before I get married and need a house."
Because of this reluctance to buy now, fewer homes are being
sold in Beijing. According to newly released figures by the Beijing
Construction Committee, about 1.17 million square meters of
commercial houses were sold in the first two months of 2006, down
24.5 percent from the same period of last year.
The situation is the same in other major cities. According to a
survey conducted among 20,000 people in 50 major cities last month
by the People's Bank of
China, a record low of 18.2 percent of them have plans to buy
private homes within the next three months.
That was a drop of 1 percentage point from the previous quarter
and 3.8 percentage points from the same period a year ago.
The central bank said the decline in Beijing, Tianjin and
Shanghai was the most prevalent.
(China Daily March 25, 2006)