HOUSING prices will likely remain stable over the next 12 months while real estate developers will face greater pressures in financing amid tighter government controls, industry experts said yesterday.
"Due to the increasingly stricter regulations aimed at both adjusting the imbalance between demand and supply and curbing the soaring property prices, we expect an easing in price rises in the Chinese property market," Fitch Ratings said yesterday in a market outlook report. "Property developers are, however, likely to face more pressure in financing and liquidity this year."
A widening gap between demand and supply has been driving up real estate prices in China over the past few years.
One factor is that land shortages and land hoarding have led to an undersupply, and another is that rising investment-driven demand have pushed property prices to a record high, industry people said.
"The market will consequently face stricter regulations, and credit tightening will become the normal practice in the sector," said Matthew Kong, associate director with Fitch's Asia Corporates team. "However, the authorities will put more emphasis on addressing supply issues while continuing to curb demand to narrow the demand-supply gap and stabilize property prices."
One of the latest measures by the central government to increase land supply is to charge developers a 20-percent fee, based on the land transaction price, if they hoard plots which have been idle for more than one year but less than two years after acquisition. Those which have been empty for more than two years will be reclaimed by the government, the State Council, China's Cabinet, said in a notice on its Website last week.
http://www.shanghaidaily.com/sp/article/2008/200801/20080118/article_345702.htm
Shanghai Real Estate market
Shanghai (Chinese: 上海; Pinyin: Shànghǎi; Shanghainese: /zɑ̃'he/; abbreviation: 沪; nickname: 申), situated on the banks of the Yangtze River Delta in East China, is the largest city of the People's Republic of China and the eighth largest in the world.[4] Widely regarded as the citadel of China's modern economy, the city also serves as one of the nation's most important cultural, commercial, financial, industrial and communications centers. Administratively, Shanghai is a municipality of the People's Republic of China that has province-level status. Shanghai is also one of the world's busiest ports, and became the largest cargo port in the world in 2005.
Originally a fishing town, Shanghai became China's most important city by the twentieth century and was the center of popular culture, intellectual discourse and political intrigue during the Republic of China era. After the communist takeover in 1949, Shanghai languished due to heavy central government taxation and cessation of foreign investment, and had many of its supposedly "bourgeois" elements purged. Following the central government's authorization of market-economic redevelopment of Shanghai in 1992, Shanghai has now surpassed early-starters Shenzhen and Guangzhou, and has since led China's economic growth. Some challenges remain for Shanghai at the beginning of the 21st century, as the city struggles to cope with increased worker migration, a huge wealth gap, and environmental degradation. Despite these challenges, Shanghai's skyscrapers and modern lifestyle are often seen as representing China's recent economic development.
Friday, January 18, 2008
Housing costs stable but builders face woes
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