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Most Polled Say Local Gov'ts Behind High Realty Prices

Data Analysis 03:14:13PM May 13, 2010 Source:SMM

BEIJING, May 13 -- More than 80 percent of respondents in a latest survey believe local governments are the major driving force behind soaring property prices.

The latest poll comes amid measures launched by governments at all levels in the past month to stem skyrocketing home prices, which have sparked heated debate.

The survey, released by the social survey center of the China Youth Daily on Tuesday, polled 5,864 people via major online poll site minyi.net.cn.

Fifty-seven percent of those polled held positive attitudes toward the government policies, while 84.8 percent said local governments should be responsible for the high housing prices.

Of those polled, 32 percent were in their 20s, 35.5 percent in their 30s and 20.4 percent past 40.

Governments at various levels received 1.6 trillion yuan ($234 billion) from land sales in 2009, accounting for about 4.7 percent of last year's GDP, statistics from the Ministry of Land and Resources showed. Sales revenue last year from the housing sector increased by 63 percent over 2008.

Nationwide, local governments cashed in big on land sales, with major cities like Hangzhou, Shanghai and Beijing being the top three, the China Real Estate Index showed.

Twenty-seven percent of those polled in the latest survey were confident of the new policies reining in price hikes. Nearly 40 percent of the respondents said the moves will only curb property speculation, while 32 percent said they were not sure where housing prices will head.

"The policy will only cause short-term fluctuations," said a Beijing house buyer surnamed Wang.

Wang bought a house in late March before the new policies rolled out.

"At first, I regretted my move because all the developers said the housing price would drop," Wang said. "Then I found they did not really lower the price."

Property prices in Beijing had a 14.7 percent year-on-year increase in this April, hitting the highest growth rate in 10 months, statistics released by the Beijing Bureau of Statistics showed.

The total area sold fell by 41 percent from that of the same period last year, reaching 1.187 million square meters.

This April also saw a 12.8 percent year-on-year increase of housing prices in 70 cities nationwide, figures from the State Statistical Bureau showed.

Fifty-seven percent of those polled in the survey also said the control policies were inadequate and they were waiting to see more effective ones.

"The point is to stick to the right policies and avoid any relapse," Yi Xianrong, director of the finance institute at the Chinese Academy of Social Sciences (CASS), was quoted by the China Youth Daily as saying.

However, Cao Jianhai, another researcher from the CASS, said there were several reasons that could lead to the rebound of housing prices.

"Although the central bank had been emphasizing on adjusting loose credit policy, the first season of 2010 witnessed 522.7 billion yuan of individual housing loans," Cao said. He also said the new policies lacked supervision on local governments.

"The policy did not specify the land management of local governments," he said.

"That means local governments can still sell land at higher prices."

"Although the policies are good in general, the effect will depend on its implementation by local governments," said Qu Weidong, a professor with Renmin University of China.

 

Most Polled Say Local Gov'ts Behind High Realty Prices

Data Analysis 03:14:13PM May 13, 2010 Source:SMM

BEIJING, May 13 -- More than 80 percent of respondents in a latest survey believe local governments are the major driving force behind soaring property prices.

The latest poll comes amid measures launched by governments at all levels in the past month to stem skyrocketing home prices, which have sparked heated debate.

The survey, released by the social survey center of the China Youth Daily on Tuesday, polled 5,864 people via major online poll site minyi.net.cn.

Fifty-seven percent of those polled held positive attitudes toward the government policies, while 84.8 percent said local governments should be responsible for the high housing prices.

Of those polled, 32 percent were in their 20s, 35.5 percent in their 30s and 20.4 percent past 40.

Governments at various levels received 1.6 trillion yuan ($234 billion) from land sales in 2009, accounting for about 4.7 percent of last year's GDP, statistics from the Ministry of Land and Resources showed. Sales revenue last year from the housing sector increased by 63 percent over 2008.

Nationwide, local governments cashed in big on land sales, with major cities like Hangzhou, Shanghai and Beijing being the top three, the China Real Estate Index showed.

Twenty-seven percent of those polled in the latest survey were confident of the new policies reining in price hikes. Nearly 40 percent of the respondents said the moves will only curb property speculation, while 32 percent said they were not sure where housing prices will head.

"The policy will only cause short-term fluctuations," said a Beijing house buyer surnamed Wang.

Wang bought a house in late March before the new policies rolled out.

"At first, I regretted my move because all the developers said the housing price would drop," Wang said. "Then I found they did not really lower the price."

Property prices in Beijing had a 14.7 percent year-on-year increase in this April, hitting the highest growth rate in 10 months, statistics released by the Beijing Bureau of Statistics showed.

The total area sold fell by 41 percent from that of the same period last year, reaching 1.187 million square meters.

This April also saw a 12.8 percent year-on-year increase of housing prices in 70 cities nationwide, figures from the State Statistical Bureau showed.

Fifty-seven percent of those polled in the survey also said the control policies were inadequate and they were waiting to see more effective ones.

"The point is to stick to the right policies and avoid any relapse," Yi Xianrong, director of the finance institute at the Chinese Academy of Social Sciences (CASS), was quoted by the China Youth Daily as saying.

However, Cao Jianhai, another researcher from the CASS, said there were several reasons that could lead to the rebound of housing prices.

"Although the central bank had been emphasizing on adjusting loose credit policy, the first season of 2010 witnessed 522.7 billion yuan of individual housing loans," Cao said. He also said the new policies lacked supervision on local governments.

"The policy did not specify the land management of local governments," he said.

"That means local governments can still sell land at higher prices."

"Although the policies are good in general, the effect will depend on its implementation by local governments," said Qu Weidong, a professor with Renmin University of China.