SCIO briefing on China's economy in Q1
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E-mail China.org.cn, April 17, 2019
Beijing Business Today
According to the statistics regarding housing prices in March, the number of cities with increasing sales prices month-on-month of both newly-constructed and second-hand residential buildings is rising. What's your response to this situation? Meanwhile, the growth of the total investment in real estate development in the first quarter is notably faster than that of 2018 and that of the same period last year. What kind of trend does it imply in the real estate market? How much does it contribute to the fix-asset investment? Thank you.
Mao Yongsheng:
Thank you for your question. There are two issues, the first is about housing prices and the second is about real estate development investment. Judging from the house price data of 70 large and medium-sized cities nationwide in March released yesterday, the growth of house prices in first and second tier cities is either slowing or lower year-on-year. In general, house prices in China have overall stability, as the growth in the majority of cities has been subdued and even dropped in some cities. Stability is still the general trend of housing prices. Nevertheless, differences surely exist due to imbalanced regional development, in which growth has been less synchronized.
Regarding the second issue, since last year, real estate development investment has been maintained at around 10%. Over the first quarter of this year, the growth of real estate investment has accelerated. This is due to two reasons: the first is the stabilization of housing prices; and the second is the rise of floor space under construction. Regarding your question about the impact of accelerated investment in real estate: accelerated investment and enlarged floor space now under construction can help to relieve the pressure of rising house prices, increasing the supply of real estate, and better achieve the balance between supply and demand in the market.
From the perspective of the real estate market, the public's expectations are relatively stable. The market positioning of "staying and not speculating" has become clearer. The house is the property of residence. and the property of consumption. We need to improve the quality of demand and the development of new urbanization. It should be clarified that we need to limit home purchases to rein in speculative and investment-driven housing demand. We also need to reinforce the regulation and governance of local government to adapt the policy based on practical situations and enhance management ability. On the whole, the real estate market is expected to be relatively stable, the land price is generally stable, and the house price operation is relatively stable. Thank you.
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