China can keep housing market steady: official
Published: Mar 15, 2022 08:59 PM
Cranes are seen at a construction site of a housing complex in Beijing. Photo: VCG

Cranes are seen at a construction site of a housing complex in Beijing. Photo: VCG

China has the foundation and conditions to keep its real estate market developing at a steady pace after rounds of efforts to stabilize land prices, home prices and expectations, Chinese officials said on Tuesday, as concerns remain over fluctuations in the property sector.

Property investment rose 3.7 percent year-on-year in the first two months of 2022, reversing a 13.9-percent slump in December, data from the National Bureau of Statistics (NBS) showed on Tuesday.

Sales by floor area declined 9.6 percent, and the value of commercial housing sales tumbled by 19.3 percent to 1.55 trillion yuan ($243.2 billion), with residential property sales contracting 22.1 percent.

The property downturn that began last year has eased somewhat thanks to continuous efforts to stabilize land prices, house prices and expectations, NBS spokesperson Fu Linghui told a press conference on Tuesday following the data release.

The price data for January sent a positive signal that the steep decline in the real estate sector was easing, after proactive and appropriate policy adjustments in the fourth quarter of 2021 were put in place, especially financial and credit policies.

New home prices in January rose month-on-month for the first time since September 2021. Prices for secondhand homes increased 0.1 percent in January from December, with Beijing and Shanghai rising 0.5 percent and 0.6 percent, respectively, official data showed in February.

"As the Government Work Report pointed out, China will uphold the principle of 'houses are for living in, not speculation' and will unswervingly promote a mechanism to foster the long-term development of the real estate industry, while maintaining stability in market expectations, as well as land and property prices," said the NBS official.

"We believe that the stable development of the real estate market still has a foundation and appropriate conditions," Fu stressed.

Although local governments have taken favorable moves since February, the investment confidence of real estate companies has not yet fully recovered, analysts said.

"Property investment growth of less than 5 percent actually signals a contraction, indicating that the willingness of real estate companies to develop and invest is weak, and they have also encountered some resistance and confusion," Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Tuesday.

Funds in place for real estate developers fell by 17.7 percent, according to the NBS data.

Yan noted that the current policies, which would reduce businesses' financial burdens, have yet to be fully transmitted, adding the most important thing is to boost property sales instead of relying solely on various external financing.

From this month going forward, it will become mainstream to actively create a better property environment, encourage real estate companies to acquire land, and eliminate work slack for the whole industry, according to Yan.