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'Resigned' to higher real estate prices

(China Daily)
Updated: 2007-01-23 10:34

The ever-rising price of property in China has become cause of worry for an increasing number of people, shows a survey.

Despite the measures taken last year to cool down the overheated real estate market, fewer people now believe that the prices would stabilize in the near future.

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Only one-fifth of the 2,582 people polled by China Youth Daily's social research centre, sina.com and ePanel Marketing Research & Consulting Co were confident that the government's steps would check the trend. Their percentage was nearly 60 in a similar survey conducted only two years ago.

The poll results announced yesterday showed another significant change: instead of blaming real estate investors for raising the prices to earn huge profits, as respondents had done two years ago, more people now blame the government's vulnerability in macro-control measures for the malaise. They said local governments lack the tools to carry out the measures.

The rising demand and the concurrent raising of prices by investors are to blame, said Bao Zonghua, president of China Real Estate And Housing Research Association. "And the macro-control measures need time to take effect."

Almost all the respondents said there was a "bubble" in the real estate market, with nearly half being certain that it would burst in 10 years. But almost 40 percent believe that the "bubble" would never burst.

A whopping 80 percent believe that real estate prices would continue to rise this year, and 30 percent fear it would do so at a greater pace.

In contrast, only 13 percent think prices would fall.

Property prices in 70 large cities last month rose at an average rate of 5.4 percentyear on year, aNational Development and Reform Commissionreport showed. Prices inBeijing, in fact, jumped 10.4 percent year on year, the second fastest growth among the 70 cities.