09-16-2010 It's been five months since China implemented cooling measures on the property market. While soaring home prices have been curbed, there are also signs of a rebound. So have the measures been effective and what is the situation now? Yin Hang takes a look.
Beijing has been in the spotlight in terms of property cooling and its market has already felt the effects of tightening policies. Home prices there have slowed for the last four consecutive months year-on-year. But in August, home prices increased 11.5 percent compared to the same month last year.
Yu Xiuqin, Beijing Municipal Bureau of Statistics said "Data from the last four months provides evidence that the government's tightening policies have worked."
Even though prices slowed, volume picked up in August. Experts say it's because a large number of new home projects flooded the market.
In order to attract more customers and compete with rivals, developers have launched various promotional campaigns and are offering discounts. Some new homes are even cheaper than pre-owned ones.
Dr. Ma Guangyuan, Chinese Academy of Social Sciences said "Many new home projects enter the market, exerting pressure on developers. The only way to survive is to lower prices. So we see prices continue to fall."
Statistics show that Beijing's housing trade volume in the first twelve days of this month increased by more than 80 percent month-on-month.
Experts say the Chinese government will continue to carry out firm tightening measures on the property market in an effort to curb prices and speculation.
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