Property prices in major cities in China will decline later this year, according to the country’s top listed developer. The decline is attributed to the government’s tightening measures to curb property prices and the expected surge of state land supply for public housing.
Wang Shi, chairman of Vanke 000002.SZ, told the Securities Daily that the central government will not stop its anti-speculative measures even as the economy slows, and developers who try to resist declining property prices are being unrealistic.
“Many developers who do not cut prices now are making a bet on policy,” said Mr. Wang, adding that they hope Beijing will withdraw its property price controls.
He noted that these were not just an economic issue but of social importance as well. “Property prices in some cities have risen to levels unacceptable to the middle class.”
Vanke and other big developers in China such as Greenland and Evergrande 3333.HK have cut property prices to boost their sales. The value of properties sold by Vanke increased 65 percent in July to 8.44 billion yuan (S$1.68 billion). To show that China is determined to cool the property market, it instructed banks in the country’s three major cities to stop offering third-home loans, including Shanghai and Beijing.