Regions with too much housing urged to restrict land supply

Related story: Housing market recovering By Zhang Jie, chinadaily.com.cn

Photo taken on July 17, 2014 shows a high-end commercial apartment project in Shaoxing, East China's Zhejiang province. [Photo/Agencies]

China's housing market is expected to rebound as the central government signaled desires to stabilize the market, China Business News reported citing industry experts.

The first half of this year is the best period to enter the market, and more people will be buying in the second half of the year, after signs of increasing housing prices emerge, said Zhang Hongwei, chief analyst of Tospur Real Estate Consulting.

Housing prices will start to pick up in the fourth quarter this year, CBN reported, citing from Ren Zhiqiang, the retired head of China's leading property giant Huayuan Group. According to Ren, 600 million square meters of inventory are expected to to be removed from stock. As housing investment and land supply are reduced, the housing supply and demand will be re-balanced, he said.

Policies in the housing market are loosing and more easing policies are expected to be unveiled. Policies such as raising the ceiling for home loans under the provident fund, and lowering the downpayment levels are to be expected, said Yan Yuejin an analyst with E-house China R&D Institute. Yan said these stimulations will boost market transactions and urge housing companies to raise prices.

Due to the new round of expected easing on housing policies, and the removal of housing inventories, the best time to buy a house is showing up in the first-tier cities, Zhang Dawei, chief analyst with property information provider Centaline told CBN.

According to Zhang, this "window" period for the housing market means the price will increase in next few months. However, as housing demand is lowering in third and forth-tier cities, not all cities will be part of this "window" period, Zhang added.

Only 20 cities' housing price will go up because of the strong demand, Zhang emphasized. After decades of high speed development, China's real estate market is starting to stabilize.

As population is gathering in first and second-tier cites, the mismatch between supply and demand will become even more marked, which could lead to a growth in housing prices in these regions. However, CBN reports that demand for housing in third and forth-tier cities will remain unchanged.