Two years of policy adjustments and regulations fail to bring down housing prices, local governments secretly buoyed markets
Chinanews.com June 26th report. Although “history’s most severe” real estate adjustment measures and regulations have now been in force for two years, media are still pointing out that housing prices throughout the country’s large and medium-sized cities have not actually fallen when compared to two years ago when policies limiting purchases were first enacted. However, this is related to how various local governments have undermined the central government’s purchasing limit policies through their own “fine-tuning”, thereby loosening such purchasing restrictions leading to increases in both quantity of sales and prices.
First-tier city housing prices have not dropped, remain at pre-adjustment levels
Over the past two years of policies and regulations [aimed at "correcting" or "cooling" the real estate market], just whether or not housing prices have dropped or risen has been the subject of much attention throughout society. According to a China Business Times report on June 25th, when compared to the peak two years ago, housing prices in first-tier cities like Beijing, Shanghai, and Guangzhou have not dropped at all. At the same time, the vast majority of housing prices in 70 large and medium-sized cities throughout the country have also not dropped since two years ago when the real estate market adjustment policies were launched.
Likewise, according to a June 25th report by Securities Times, recently Beijing housing prices have been consistently creeping upwards, with average prices around 18,000 yuan [per square meter] a month ago now nearly breaking the 20,000 mark.
Local governments secretly propped up markets, “fine tuning” the central government’s house purchasing limit policies
Previously, various state ministries and commissions including the MOHURD [Minsitry of Housing and Urban-Rural Development], NDRC [National Development and Reform Commission], CBRC [China Banking Regulatory Commission], and China’s Central Bank had issued a statement denying recent comments about a loosening of the real estate market. Likewise, in May of this year, while in investigating the state of the economy in Wuhan, Premier of the State Council Wen Jiabao also indicated stabilizing real estate market adjustment and regulation policies, and strictly implementing differential housing credit, taxation policies, and purchasing limit policies.
However, the central government’s many statements did not prevent local governments from using “fine tuning” of the purchasing limit policies to achieve goals of propping up the markets. According to data from the market research department of Beijing Centaline [a real estate agency], from the second half of 2011, 33 cities such as Beijing, Shanghai, Hangzhou, Chongqing, Xiamen, Wuhan, Heifei, Nanjing, Changzhou, Jilin, Zhongshan, Changchun, Wuhu, Conghua, Ma’anshan, and Shenyang have instituted various fine-tuning policies, the contents of which involve items such as the purchasing limit policy, land transfers, normal residential standards, preferential taxation, and home purchasing subsidies. Other than cities like Wuhu, Foshan, and Chengdu whose fine tuning measures went too far and were halted no long after they were enacted, all other [fine tuning] policies were essentially tacitly allowed.
Comments from Sina:
Adjustments have failed yet again. Without real estate taxes and vacancy taxes, and so long as the country is not networked and government official don’t make public their real estate holdings, everything else is just bullshit! Government regulation has gotten weak yet again.
Their [the government] finances rely on real estate, and they have so many houses in their hands, so how could prices possibly go down?
I’m in a third-tier city and housing prices here not only haven’t dropped, they’ve risen a lot, from 2500 yuan per square meter 3 years ago to 3800 yuan now… The ordinary common people still cannot afford it! …How come the more real estate policies are adjusted [to bring down prices], the more expensive they are becoming!!!
To trust the government to adjust [lower] housing prices is simply a big joke!
Those who haven’t felt prices dropping, please raise your hands [upvote this comment]!!!
No matter what the reasons is for prices not lowering, ultimately those who suffer are still the impoverished ordinary common people! Ultimately those who benefit are still the government, real estate developers, and the rich minority! A young worker who makes 3000 [RMB] a month can work an entire lifetime and still not afford to buy an ordinary apartment/home!!!
This is exactly what China is like, swearing up and down that something will be done but when the time comes, not a single thing is accomplished. Every time they regulate and adjust, prices just get higher and higher, ultimately a failure.
Avaricious to a shameless degree. Experts lying through their teeth. All thinking the ordinary common people are fools. Ordinary workers can work 10 lives and still not afford to buy a home.
Real estate prices as a matter of fact is something property developers and the ZF collude on to cheat the ordinary common people of their money!
The marketization and commercialization of real estate is simply a new method of squeezing money out of the ordinary common people, so everyone is a slave to debt. The country now has money, yet the ordinary common people are in an abyss of suffering. Everything being marketized causes everyone to become unscrupulous in order to make money, with morality in decline, and everyone for themselves.
The moment prices drop, the entire country’s housing market will collapse. The Chinese who have houses all want prices to rise, only those of us ordinary common people who don’t have houses want prices to fall. Sigh… but no matter how much it drops, we still can’t afford it.
Precisely the opposite [of what was intended], prices just continued rising.
If people were actually held accountable and could be removed from office, then you’ll see whether or not they’ll do anything [effective about bringing down housing prices]! Remove some people and then they’ll be honest [actually do their jobs/fulfill their promises]!
Wuhan housing prices are over 20% higher than they were at the same time last year. Housing prices dropping is just a joke meant to deceive the poor, those who believe it simply have suffered yet another April Fool’s Day, and its not just an April Fool’s Day, but an April Fool’s Year, having been made a fool for a year.
There are policies up top [from the central government], and countermeasures below [from the local government].
What are current average housing property prices in your area (inside and outside of China)?