Rising anxieties for China's property developers

BEIJING - "When will the property tax come out and how will it impact the market?", "Are we going to see the economy and real estate market crash?", "What are the prospects for developing elderly care properties?"

Puzzled Chinese property developers have a string of questions.

No specific control or fine-tuning policies were mentioned in the government work report, which outlined this year's reform priorities at the just-concluded annual parliamentary session. But the sweeping agenda touched upon financial, taxation and land reforms, all of which are set to impact the real estate market.

Property market shows signs of cooling down

Home price growth slows, further moderation eyed

"No doubt China's property developers are facing challenges. They have to adjust themselves for expansive reform, seek renewed growth while surviving cut-throat competition," said Chi Fulin, director of the China (Hainan) Institute for Reform and Development.

"The road ahead will be bumpy, prepare for it," Chi said at a forum where over 200 real estate developers gathered last week.

Future growth: good, but not hot

"In the past decade, you just invested, built houses and the money would pour into your pocket. But now I feel pressure, not sure of the prospects," a property developer from Southwest China's Chongqing municipality said.

The picture is indeed not rosy.

Housing prices lost steam in February. New home prices in China's 70 major cities rose 8.7 percent year on year, down from the 9.6 percent growth in January. ' Meanwhile, regional divergence was marked between first and second-tier cities. Property price discounts in some of China's eastern cities last month caused jitters in the market and worries of an imminent crash.

"A sudden hard landing is unlikely now, as development of the real estate sector with the ongoing urbanization push will still be a major driver for overall economic growth," said Chen Huai, a senior researcher of housing and urban-rural development at the Chinese Academy of Social Sciences.