ecns [expanded by feedex.net]
ecns
First-tier cities show sign of housing market overheating
http://www.ecns.cn/business/2016/02-26/200610.shtml
Feb 26th 2016, 09:27
Destocking the property inventory has been set by the central government as a major task this year.
China's property market took a downturn in 2014 due to weak demand and a supply glut, but recent policies aimed at stimulating demand seem to be having an affect, especially in first-tier cities.
A slew of stimulus packages, including the latest tax cuts, appear to be having the desired effect across the country.
A real estate agent in Beijing said there has been a clear increase in trade over the past week.
"As the deed tax cutting policy has taken effect, we receive around a thousand customers for consultation every day. This number is much larger than before. People see the apparent benefits of the tax stimulation."
But meanwhile, latest stats are warning property markets in China's first-tier cities may overheat."
In January, Beijing saw 25,000 second-hand houses sold, reaching a 27-month high.
The figure comes against the backdrop of the city's record high income from land sales last year that exceeded 30 billion U.S. dollars.
Zhang Dawei, chief analyst with the Centaline Property, says the city's home market is likely to continue heating up.
"From the supply-and-demand perspective, Beijing has around 60,000 houses for sale. But the city sells more than 6,000 houses per month. So, the property destocking process need only take ten months. The supply and demand structure is tense, and some high-priced houses will be very influential to the market pricing."
At the same time, concerns are also rising over the skyrocketing home prices in metropolises like Shenzhen.
The southern city has seen property prices rise for ten consecutive months, although this trend could be checked by further regulation on who can buy.
In Shanghai, property developers have been restricting the supply of new homes on the market, to maintain prices, but also in preparation for a bounce back in the real estate sector.
Analyst Zhang Dawei says with small and medium sized cities still having excessive housing in stock and big cities beginning to face an overheated market, policy makers will need to consider differential policies.
"The effect of regulatory policies is mainly reflected in first-tier cities. But that is running counter to the policy expectation. In the future, the policy may be tailored for different cities to avoid non-rationality rises of housing prices."
It is reported local governments have taken measures to prevent the market from overheating.
Home buyers without Shenzhen household registration will be required to have paid social insurance for three years instead of one.
Also, a guideline is taking effect in Shanghai this month, regulating the distribution of properties. Medium or small sized homes in central areas must account for no less than 70 percent of the market.
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