By Liu Jie (China Daily)
Updated: 2007-07-13 07:20

As property prices in China continue to increase despite government measures to cool the market, the majority of respondents to a recent China Daily survey said they will not buy houses amid spiraling prices.

The recent survey by the website www.ming7.cn showed that 685, or 54.17 percent of the 1,266 respondents, said they would not purchase property now, while 373 or 29.46 percent indicated they still want to buy. The rest gave no comment.

Property prices in China's 70 large- and medium-sized cities jumped by 6.4 percent year-on-year in May, faster than the 5.4 percent growth in April, despite government efforts to rein in the overheated sector.

Five cities saw a double-digit growth in prices for new homes. Shenzhen led the pack with a 12.3 percent hike, while Beijing witnessed a 10.3 percent increase.

The majority of people choosing to not buy houses currently said they simply could not afford the high prices.

"The price is unreasonable," said one respondent living in Beijing. "The monthly salaries for my wife and I are around 10,000 yuan together, and the average prices for commercial apartments on the Fourth Ring Road has exceeded our total income."

Some said they believe that there is a bubble in the Chinese real estate market and have adopted a wait-and-see attitude.

"I firmly believe the property bubble will be burst in two to three years. After housing prices slump to a reasonable level, I will consider getting my own house," one respondent said.

The reasons for people to select "no" in the survey seemed similar, while causes for "yes" answers were more diverse.

Some of those willing to buy suggested that home values are increasing faster than annual salaries.

"Why not buy now and increase your wealth?" asked one.

Another respondent felt lucky to buy an apartment years ago and be able to witness prices climbing every year.

"I think buying a house as soon as possible is better - if I have the money I will buy now of course," the respondent said.

Another participant agreed, noting that China has a large population with limited land resources, so the conflict between land supply and development will inevitably intensify and housing prices will certainly increase further.

Some others chose to buy for personal reasons like marriage and immigration.

An American respondent said that he married a woman in Dalian and would like to settle down in China. "I am going to buy a flat in Dalian for my new family, though it is too much money," he said.

Some respondents said they have invested in property due to recent volatility in China's stock market, as real estate is seen as a more stable investment channel.

Other respondents noted that current soaring property prices prevent people who really need apartments from purchasing them.

"The government has taken measures to solve the dilemma, but there is no obvious effect," said one respondent. "It is because the root of the problem has not yet been found - what is the root?"

Some urged the government to find the fundamental reasons for rising real estate prices and adopt policies to solve the problem, closely related to people's lives and social development, as soon as possible.

(China Daily 07/13/2007 page15)