In May 2009, the housing transaction volumes in eight cities, including Shanghai, Beijing, Shenzhen, Nanjing, Wuhan, Hangzhou, Tianjin and Xiamen, increased by 45 to 259% year-on-year. The average price has generally increased compared to the previous period, with a maximum increase rate of 11%. A turnover of over RMB one trillion is a strong indication China’s real estate market has recovered.
According to Jing Ulrich, managing director of JPMorgan ChaseChina’s real estate market has begun to recover substantially.
He added that real estate construction and sales have stimulated the growth of upstream and downstream industries, and the increase of investment in the real estate industry will be an important benchmark for the sustainability of overall investment growth.
However, there are differing opinions.
Yi Xianrong, a research fellow at the finance research institute under the Chinese Academy of Social Sciences (CASS) says that judging from the overall situation, it is still a rebound following an excessive real estate market recession in 2008. It is a result of the release of rigid demand and the market’s self-adjustment, and thus cannot be deemed a sign of recovery.
People’s Daily Online reported that Vice President Zhu Yongmin of Shanghai Shengji Group, also said that the following three important indices must be considered when judging the recovery of the real estate industry: first, the overall recovery of the global economy and the continuous increase of consumers’ purchasing power; second, the continuous increase of land transaction volumes and the reduction of land stock; third, the relative stability between real estate transaction volumes and prices within a certain period of time.
He said, "We cannot use indices in peak sales seasons as a basis for a forecast."