Real Estate

China's property market is not facing big risks in the short term despite a rapid growing real estate price in some key cities this year, industry experts said at a national forum today.

"A key indicator to judge the scale of the property bubble is to see the financial leverage of mortgage and property developers' debt ratio," Teng Tai, managing director of China Galaxy Securities Companies Limited, said at the CIHAF 2009, the country's largest professional real estate expo.

"In China, the financial leverage of home purchase is still under control and is not likely to trigger a crisis like the ones US and Dubai experienced."

The property prices in China's major cities, such as Beijing and Shanghai, has seen growth of more than 50 percent this year, thus leading to concerns that the country will have a big bubble in the real estate sector.

"One of the major measures that government should take to curb the fast growing property price is to pump more land supply into the market and construct more affordable housing and low-rent housing for low-income families," said Chen Huai, dean of the policy research office of the ministry of housing and urban-rural construction.

During the three-day expo, a land promotion forum was also held, with more than 10 cities over the country, including Beijing, Rizhao and Qingdao offering many primary land parcels for auction. The cities also brought their flagship property projects to the expo. Hainan province, for instance, brought opportunities for land from Phoenix Island, the most expensive project in Sanya with sales prices ranging from 50,000 yuan to 100,000 yuan per sqm.
 

In the hit Chinese television drama, "Dwelling Narrowness," one of the main characters becomes the mistress of a government official in order to help repay her older sister's mortgage.

The 35-episode series, which stars actress Vivian Wu (Wu Junmei), has touched a raw nerve in its audience, who sympathize with the characters moral dilemmas.

The story follows the trials of two full sisters struggling to buy affordable apartments in an unnamed big city, believed to resemble Shanghai, where house prices have soared beyond the lifetime disposable incomes of most people.

"I was deeply moved though I don't think it was the right decision," says Beijing office worker Zhou Yuan of the younger sister's decision to become a mistress.

But the characters are simply mirroring the choices that many urban Chinese are facing everyday as the booming real estate market erodes their dreams of becoming home-owners.

China should keep home prices from long time "abnormal increases" and divert profits made from home price hikes to the public through taxation, a senior property official said here Friday.

Dong Zuoji, director of land planning department of the Ministry of Land and Resources, said home prices would continue to rise as the land in the world's fastest-growing economy is becoming increasingly scarce, but the government should use taxes to give the added value of the land back to society.

"China hasn't seen overcapacity in real estate sector on the whole, otherwise home prices wouldn't have gained so much," he said while attending a meeting held in Beijing.

Dong said the government would increase land supply for subsidized homes and adopt measures to prevent developers from hoarding land.

The government would also guarantee land use for high-tech, high added-value enterprises while limiting that of backward production projects.

Home prices in 70 large and medium-sized Chinese cities nationwide rose 3.9 percent in October from a year earlier, the National Bureau of Statistics (NBS) announced Tuesday.

The year-on-year price growth rate was 1.1 percentage points higher than that of September, said the NBS.

Combined commercial housing projects investment nationwide hiked by 14.1 percent over past ten months year on year to 1.995 trillion yuan (292.9 billion U.S. dollars), according to the NBS.

China's national property climate index, which reflects overall conditions in this sector, increased to 102.03, up 0.95 point from September, the seventh consecutive month that the index seeing month-on-month growth, suggesting a recovery of the sector.

A reading of above 100 is positive, while a figure below that level indicates weak conditions.