Ms. Jiao Yurong, a 50-year-old accountant, has been saving to buy her son a flat.
However, escalating property prices in China, compounded with a series of measures by the government to rein them in, are making it hard for the mother to proceed with her plan. “Just when we had saved enough for a down payment, prices surged,” said Ms. Jiao, a resident in Beijing. “The policy is so unstable… I’m so confused.”
Potential homebuyers are reeling from a series of measures introduced by the Chinese government to control soaring prices amid persistent fears about a bubble forming in the property sector.
Authorities have raised the minimum down payments for second homes, introduced new curbs on loans for third home acquisitions and tightened restrictions nationwide on advance sales of new property developments.
The Beijing government has even restricted families to one new apartment purchase and barred those who failed to pay their taxes or made social security contributions in the city for a year from getting mortgages. “Sellers have started to lower the prices,” said Hu Jinghui, vice-general manager of 5i5j, a property agency chain with some 600 outlets in eight cities across China. “But the buyers are still waiting.”
At the Beijing Real Estate Expo in April, a new apartment in the city has an average price of about 21,164 yuan (S$4,302.7) psm, according to state media. That indicates that a 90-sq-m apartment in Beijing would sell at 1.9 million yuan, compared with last year’s average per capita income of 26,738 yuan.
Mr. Hu said that property prices have dropped an average of 10 percent to 15 percent, with the number of home acquisitions plummeting by 50 percent, since the capital implemented the austerity measures on April 30.
Mr. Jack Guan, a 27-year-old securities firm executive from the coastal city of Qingdao, said he was unable to make a deal last year, when he was searching for his first home on the outskirts of Beijing, as prices “went insane”.
“I am going to wait and see. I think this is an approach that many people have adopted as now there is a possibility for a price cut,” he said. “It will not cost me much if I wait for another two years.”
So far, the new measures seemed to have had limited effect, with prices in major cities in China rising 12.8 percent last month, a double-digit increase for the third straight month, according to official data released on Tuesday.
More tough measures are expected to be implemented as controlling price increases had become a “political task” for the ruling Communists, said Ms. Lina Wong, managing director of Colliers International in East and South-West China.