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Unlike many other Chinese cities, Guangzhou has maintained stable property prices, and will continue to do so, market analysts say.
Prices have moved up and down by relatively small amounts over the past couple of years, and it is very unlikely that they will skyrocket this year, according to Pan Shujian, a property professor at Guangzhou University.
He estimated price rises at residential property projects of between 2 to 5 percent this year.
Official statistics show the average price of apartments was 5,356 yuan (US$645) per square metre downtown in 2004, up 7.47 percent from 2003.
The expert attributed the stable prices in the city's property market to the cautious attitude of citizens who have learned from the failed investments of those who speculated in property projects in Hong Kong in the second half of the 1990s.
Prices kept climbing from 1992, peaking at 6,677 yuan (US$804.46) per square metre in 1996.
Prices then fell until 2003, bottoming out at 5,274 yuan (US$632.17) per square metre, leaving many speculators with large losses.
Pan said caution in the market is also a result of the experiences of more than 10,000 Hong Kong house owners who were driven to the verge of pennilessness when prices nosedived.
Chen Dunlin, chairman of Guangzhou Real Estate Association, attributed the stable prices to the efforts of the local authorities in monitoring the property market, and nipping the possibility of a price hike in the bud.
The municipal authorities have made a point of analyzing and forecasting land supply and leasing land accordingly, said Chen.
They have also kept a close eye on property developers to prevent them from cheating customers when selling property.
The authorities' strategy of better mapping out urban planning policy and pouring investment into infrastructure has alleviated the pressure on supply of property projects in downtown areas and curbed the momentum of price surges due to intensifying demand, the chairman added.
Chen said that the municipal authorities have worked to expose joint attempts by property developers to raise prices.
Earlier this year, several developers claimed at a forum that property prices in the city will rise by 20 percent compared to 2004.
However, the Municipal Land and Housing Administration immediately released official figures, giving citizens a more accurate picture of how the market is likely to develop.
"It is likely that the price will edge up this year, but the growth rate will be generally acceptable to citizens," Chen said.
According to statistics recently released by the Guangzhou Municipal Land and Housing Administration, the average price of downtown apartments in January dropped by 162 yuan (US$19.51) per square metre from the same period in 2004, and the price in February dipped by a further 21 yuan (US$2.53).
The average property price downtown was 6,053 yuan (US$729.28) per square metre in February.
Chen Rugui, director of the Guangzhou Municipal Construction Commission, said he believes the city's property market will remain stable and healthy this year.
During the annual session of municipal people's congress late last month, the director said land supply for property development will be adequate this year.
The city will set aside 29 plots of land for development, covering an area of 1.1 million square metres in all.
(China Daily April 12, 2005)
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