Housing prices show sign of a fall
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The real estate sector has finally shown a dip four months after the government launched tightening policies. Housing prices in Beijing Tongzhou District fell to 16,000 yuan ($2350.62), down nearly 10,000 yuan ($1469.14) per square meter, according to recent reports.
The People's Daily, the official mouthpiece of the Chinese Communist Party, Tuesday said that housing prices would see further decreases in the future, as policies take effect.
Though the drop in prices is still not widespread, it is a sign the government truly wants the price to go down, and that series of policies are not just a show.
Foreign firms, such has Blackstone, Morgan Stanley, USGroup, Merrill Lynch and Softbank Asia, have entered China's real estate market in various forms recently.
However, analysts said that it is a bad timing for such investment.
"The government is really taking on the real estate sector.
The bubble is so big that the government has to do some thing," said Wang Deyong, a real estate industry analyst with CITIC Securities.
At the beginning of this month, China's banking regulator instructed commercial banks to conduct a stress test. Results of most banks show that a 50 percent fall in housing prices in key cities will not affect the banks much.
The regulator stated that hypothetical scenarios did not reflect its forecasts nor did they herald any change in policies. However, "the results still make the government feel more or less relieved about its decision to further adopt the tightening policies," said Wang.
September and October is the traditional "golden season" for the real estate sector. Now that the buying season is upcoming the future trend of housing price would surface.
"Housing prices should at least fall to its level at the beginning of the year," said Wang.
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