Economy

Home prices likely to fall by 10%: Expert

(Xinhua)
Updated: 2011-05-30 11:13

BEIJING - Analysts said Chinese home prices are likely to fall by more than 10 percent this year, due to the government's prudent monetary policy and other tightening measures, the Beijing News reported Monday.

Home transactions will decrease by 7 percent this year while sales value may drop 10 percent as measures to curb excessive rises in home prices have deterred speculative home buying. That may drag property prices down by over 10 percent in 2011, said Nie Meisheng, head of the China Real Estate Chamber of Commerce at a forum on real estate.

Related readings:  Affordable housing for the needy  China to double land supply to cool housing market  SOEs to join subsidized housing projects

Dong Fan, professor at Beijing Normal University, expected a 10 to 15 percent decrease in property prices in the second half.

Qin Hong, analyst at the Ministry of Housing and Urban-Rural Development, suggested that developers accelerate construction of rental properties to increase housing supply and put a lid on the rapid rise of home prices.

"Public rented accommodation should dominate the country's rental industry while the private rented sector is a necessary complement," Qin said, while adding that construction of rental housing projects requires massive financial inputs and favorable taxation policies.

China's home prices rose in 67 of 70 cities monitored by the government in April from last year. New home prices in Urumqi, capital city of Xinjiang Uygur autonomous region, posted the biggest gain, up 9.3 percent in April from a year earlier.