By Shao Ting, Institute of Market Economy, Development Research Center of the State Council (DRC)

Research Report No 106, 2015 (Total 4791)

Abstract:

In the first half of 2015, due to the impact of preferential policies in areas of finance and taxation, house sales in China were notably on the rise. There was a gradual return of confidence among real estate developers and a sign of improvement in such leading indicators as investment and area of purchased land. However, owing to a supply glut, the present round of recovery in the housing market was characterized by an effort at reducing the number of unsold houses. As developers in general adopted a measure to ensure sales volume and stabilize prices, real estate prices were kept relatively stable. With regard to different regions, a deepening divergence relating to housing market performance still remained, with a much better situation in first- and second-tier cities than in third- and fourth-tier ones. In the second half of 2015, growth in housing sales will continue. Yet, as a result of the overall supply-demand situation, no great fluctuation will be observed in house prices. In cities beset with an over-supply of housing, prices will further trend lower. Growth of full-year sales and investment in real estate is expected to be 5% and 6% respectively year on year. In terms of regulatory policies in the second half of 2015, attention should be paid to utilizing housing finance policies in a proper manner and stimulating the regulation initiatives in local governments.