The huge profits experienced by the country's real estate market in the past decade have come to an end, according to the National Bureau of Statistics (NBS).
In Wednesday's Beijing News, the mainstream newspaper said NBS had announced that the country's current macro economy, economic policies and shrinking housing demand had started to drive down the growth of house prices.
The bureau also warned that in spite of the slowdown in price increases, real estate was not expected to see a return to rational prices until a reform of the real estate market was reached.
In the first half, the People's Bank of China, the central bank, continued its tightening monetary policy by raising the bank reserve ratio five times. The State Council, the country's Cabinet, ordered governments to reclaim land that had been sitting idle for at least two years as of January. These measures helped curb the housing bubble.
"Now, growth of housing prices has started lowering, but only by a small margin," NBS analysts said. They noted housing demand was restrained by monetary, land and taxation policies adopted since January, which had weakened the momentum of rising house prices.
From January to May, the total transacted area of newly built commodity apartments and second-hand houses in 40 major cities dropped 24.9 and 20.9 percent, respectively, according to the statistics. For example, the residential apartment turnover in Beijing was about 3.5 million square meters in the first half, down 49.5 percent from the same period last year.
The statistics showed house prices had averaged gains of 10.2 percent in 70 Chinese major cities in the first half, up 4.2 percentage points year on year. The growth rate in January was 11.3 percent more than the same period a year earlier and had shrunk to 8.2 percent in June.
There were 14 cities that had experienced price falls on a month-on-month basis, including Chengdu and Nanchang, the capitals of Sichuan and Jiangxi provinces, respectively, according to NBS figures.
(Xinhua News Agency August 7, 2008)
