A middle-aged account manager for a public relations company in Guangzhou, Liu Liye said he would have bought another apartment had it not been for the State's late mortgage loan policy and the enactment of the eight rules for stabilizing housing prices.

Having owned an apartment of some 90 square meters through the State's housing reform practice in the late 1990s, Liu had been looking for a bigger apartment.

"I had planned to buy an apartment downtown with a floor space of about 150 square meters within the first half of this year. But I changed my mind when I learned of the State's policy change soon after Spring Festival," Liu told China Daily.

"Why not just wait for more favorable bargains?"

Like Liu, a growing number of would-be house buyers in Guangzhou now have a "wait-and-see" attitude towards property deals. Xie Xiaodan, deputy director of the Guangzhou Land and House Administration, said the fall of prices and fewer transactions in the past two months has much to do with such hesitation.

The official said April and May are usually a boom time for the real estate market in Guangzhou.

Latest official statistics indicate property prices in the city's eight districts downtown were 6,032 yuan (US$726.75) per square meter on average in May, a fall of 93 yuan (US$11.20) from the 6,125 yuan (US$737.95) in April.

And the average April price fell 181 yuan (US$21.81) from the figure in March.

The total space of houses sold in the eight urban districts was 556,900 square metres in May, down 2.64 percent from the comparable period in 2004.

The total space of houses for sale was 690,200 square metres in May, down 10.08 percent from a year ago.

Xie said the trend of lower prices and fewer sales will continue in the coming couple of months.

He said more potential buyers are waiting for better prices while an increasing number of property developers are reluctant to launch promotional campaigns or place promotional ads.

He said prices will not rise or fall dramatically in the second half of this year.

According to Ye Yan, vice-president of Paragon Group (Guangzhou) Ltd, one of Guangzhou's strongest real estate developers, the "wait-and-see" period will not last long, adding that properties will sell better later this year as long as they are well-positioned and worth the price.

She said properties enjoying an excellent location and environment and those with good indoor structures will be competitive even if the price is higher than the average in Guangzhou. She based her viewpoint on the popularity of her projects as well as on the fact that 84 percent of Guangzhou citizens have owned at least one apartment, and over 20 percent of them have owned at least two apartments. Therefore, she said, most local citizens will look for bigger and better apartments.

She said 70 percent of her company's Lido Hill apartments were sold the first day they were put up for sale recently. The price reached 8100 yuan (US$975.90) per square meter.

According to Cai Suisheng, secretary of Guangdong Real Estate Association, the State's new property policies have also frustrated transactions in the second-hand property market in Guangzhou.

The new policies have put an end to the practice of selling private houses without paying business tax, and require owners who sell their houses within two years of buying them to pay tax on the sale price.

Potential second-hand house buyers have likewise been holding a "wait-and- see" attitude.

(China Daily July 19, 2005)