Housing markets in 1st-tier cities showing signs of recovery

Beijing's commercial residential housing price averaged 21,000 yuan per square meters in August, an increase of about 11 percent from the previous month, which is the highest monthly growth rate since China adopted housing market regulation and control policies. The average weekly housing price in Shanghai also returned to more than 22,000 yuan, the new high since the adoption of housing market regulation and control policies.

With the rise in both transaction volume and turnover in the housing market of first-tier cities, the monthly sales of real estate developer Vanke also set a new record. Vanke sold 915,000 square meters of housing in August 2010 for 11 billion yuan, representing an increase of 85 percent and 149 percent, respectively, from the same period of 2009, and setting a new monthly sales record among all domestic real estate developers.

The statistical data issued by China Index Research Institute on Sept. 1 also shows that the average housing price of 10 major surveyed cities saw a 45 percent year-on-year increase. Of them, Beijing's housing price had the highest year-on-year growth rate of 72 percent.

Zhou Dewen, president of Wenzhou SME Promotion Council, said that many people of Wenzhou have started forming groups once again to speculate on the housing market. Wang Zhennan, boss of Wenzhou-based T-House, expects a new round of investment waves in the housing market. Wenzhou’s speculators expect the housing price to be up around 10 percent in the near future.

Some real estate developers in Beijing have successively raised the prices for the second-phase housing projects that were recently put on sale by at least 10 percent compared with that for the first-phase housing projects.

"As the real estate developers recently put many new housing projects on sale, the housing demand accumulated over the past several months has started to be released," said Su Xuejing, chief housing industry analyst at Changjiang Securities. "Therefore, the recovery in the housing transaction volume has just met our expectations."

The recovery in the housing market has caused the market to estimate tighter regulation policies. Some industry insiders believe that the housing market recovery has taken place amid the gradual deepening of the implementation of the regulation and control policies. It is reasonable for real estate developers to be concerned that if the rally continues, it will likely to lead to the adoption of tougher housing market regulation and control measures.

By People's Daily Online