More people waiting rather than buying houses

[HenryTo]

An older article dated in late August but still very relevant. Suggests that house building and real estate investment is definitely emerging into a bubble in parts of China.
-----------------------------------------------------------------------------
More people waiting rather than buying houses

By the end of May 2005, the growth of loans lent by China's big four state commercial banks to individuals for house purchase decreased 50 billion yuan (6.2 billion US dollars) year on year, the Economic Daily reported on August 25.

The figures are provided by a housing industry chamber of commerce affiliated to the All-China Federation of Industry and Commerce.

More consumers are waiting for the further drop of housing prices with money in their hands rather than buying houses, according to a report released by the chamber of commerce on China's real estate in the second quarter.

In the second quarter, China's housing sales price rose 8.0 percent year on year, 2.4 percentage points lower than the same period last year, the report said.

Compared with the first quarter, the housing sales price rose 1.5 percent.

The growth rate of investment in commercial housing development, however, still reached 23.3 percent in the first six months this year, the report said.

In May 2005, seven government departments issued a joint circular in an attempt to stabilize the rocketing housing prices in China.

According to the new policy, private houses sold after being inhabited for less than two years must pay business taxes according to the whole sale price.

The circular also demanded that local real estate administrative departments make clear requirements on price levels and housing sizes before giving permission for land use, stressing reducing construction costs for affordable housing and restricting developer profits to 3 percent.

Source:Xinhua