Home prices in no condition to rebound

BEIJING - Real estate prices in China are in no condition to rebound with the government firmly set to continue its regulation on the property market, said the Ministry of Housing and Urban-Rural Development (MOHURD).

Despite a rise in sales in recent months, speculative buying is still under control, and both property prices and housing inventories have remained at a stable level, a MOHURD official was quoted by Sunday's People's Daily, the flagship newspaper of the Communist Party of China (CPC), as saying.

The recent rebound in home-buying activities is because of higher demand that had been suppressed and by an increase of new housing supply and lower loan rates, said the official, whose name was not provided by the newspaper.

In August, out of a statistical pool of 70 major cities, 36 cities recorded higher new house prices than a month earlier, according to figures released by the National Bureau of Statistics (NBS).

On a year-on-year basis, 14 out of the 70 cities witnessed price increases of up to 1.3 percent year on year last month.

There has not been a widespread rebound in property prices, said the official.

Though expectations of price rises have spurred some rush-buying in June and July, in general, most house buyers are looking for starter homes instead of speculative deals, said the official, who expects the completion of more affordable housing will further stabilize market expectations.

In August, the government tried to curb the bounce-back of sales by reiterating its firm stance on property tightening, which has started to pay off, according to the official.

Sales of new commercial properties dipped 4.1 percent year on year to 570 million square meters in the first eight months of 2012, according to the NBS.

Also, with rising investment in the property sector, supplies of available homes will be adequate in future months, the official said, citing figures that property investment totalled 4.4 trillion yuan ($698 million) in the January-August period, up 15.6 percent year on year.

Meanwhile, new commercial properties that started construction fell 11.1 percent from the same period last year, down 2.3 percentage points from the January-July level.

But the official also noted that negative factors do exist against a stable property market, and that regulation over the sector is still at a crucial stage.

China has tightened its curbs on the property sector since 2010 in an effort to bring rocketing house prices back to a reasonable level. The government has restricted purchases in several cities while requiring higher down payments and introducing property taxes.

Next, the government will continue to carry out its regulative policies to ensure implementation, said the official.

Differential credit and taxation policies will continue to be implemented to curb speculative buying. More work will be done to enhance taxation over unsold properties and there will be an expansion of property tax pilot schemes, the official added.

The Chinese government will also work to increase land supply and the stock of small and medium commercial properties. It will also improve market monitoring to make full preparations for future a price rebound, said the official.