Li Jingguo, director of the research center for urban development and environment under the CASS. said, ‘Last year was the most gloomy period for China’s real estate market since housing reform in 1998, in face of the global economic downturn.’
The volume of housing sales fell by 19.7% last year.
However, the average price of a home increased by 6.5%.
Li Jingguo, said the unusual phenomenon of rising prices and falling transactions indicates an ‘unhealthy development’ in the property sector.
He said, ‘Clinging to the hope that the government will roll out some rescue measures to reboot the market, real estate developers are reluctant to lower prices in tune with the market demand contraction.’
The Blue Book forecasts a rebound in sales volume for houses because many developers will be forced to slash housing prices to ensure a smooth capital flow.
In addition, a national welfare-housing program will help stabilize the housing and real estate industry.
The welfare-housing plan, listed on top of the country’s stimulus package, will benefit low-income people who could not afford the commercial housing.
China Daily reported that Zhu Zhongyi, vice-chairman of China Real Estate Association, said a healthy property market calls for a reasonable growth in prices.
‘We need to find a balance between the consumers anticipation and sellers benefit.’