By Fang Yunyu Source:Global Times Published: 2013-5-2 23:33:00
Despite the government's recent efforts to reinforce cooling measures for the real estate sector, the average home prices across 100 major Chinese cities continued rising in April, according to data released Thursday.
The average new residential home price in the 100 cities in April reached 10,098 yuan ($1,638.91) per square meter, up 1 percent from March and up 5.34 percent year-on-year, according to data from the China Real Estate Index System.
Beijing saw its average home price jump by 3.11 percent month-on-month and 15.26 percent year-on-year in April.
"The relentless rise in home prices demonstrates that the demand for home buying is quite strong in the market," Xue Jianxiong, a senior real estate analyst at E-house China R&D Institute, told the Global Times Thursday.
The real estate curbing policies do not seem to be working, Xue noted.
The central government announced on March 1 that it would introduce a 20 percent capital gains tax on secondhand home sales, along with higher down-payments and mortgages for second-time home buyers, in an effort to discourage speculation in the market.
Furthermore, at the end of March, local governments in major cities, including Beijing, Shanghai and Guangzhou, all laid down detailed regulations to cool down the housing market.
"But the severe tightening measures on the property market have not put off homebuyers, as evidenced by the fact that during the policy vacuum in March ahead of the implementation of the new measures, many people rushed to local governmental property agencies to close deals," Liu Yuan, a senior research manager at Centaline China Real Estate, told the Global Times Thursday.
If people really thought that home prices would decline, they would wait for it to happen, Liu noted.
Liu said market expectations usually determine the trend of home prices, rather than government policies.
Also, most local governments, which rely on selling land as their major source of fiscal revenue, have not imposed the new capital gains tax so far.
Since 2010, the country has been carrying out measures to rein in the overheated real estate sector, but with relatively limited effect. This has prompted the central government to gradually increase the extent of the curbing policies.
A real estate industry insider told the Global Times that policymakers themselves are unwilling to curb the market too much as it might cut the value of their own properties.
"Although they claim they want to cool down the market, they have the motivation not to let prices drop," he said.
"Due to a lack of investment channels, and the absence of a comprehensive welfare system, it's natural for people to buy houses to preserve or even increase the value of their assets," said Liu, noting that taxes and barriers to buying homes are not an effective solution to soaring home prices.