| Sluggish house market seen in 2009 on glut |
SHANGHAI, Feb. 2 -- The residential property market in China will likely turn sluggish in 2009 because of an anticipated oversupply, a recent report released by the research arm of the National Development and Reform Commission, the nation's top planner, has said.
The supply of residential property is expected to dwarf the demand across the country over the coming years and that will lead to noticeable changes in the investment and consumption sectors.
By as late as 2009, China's residential property market will see a stagnation, the NDRC report predicted, citing two main reasons.
Growth in investment and areas under construction has outstripped a sales increase over the past few years. Between 2001 and 2006, investment in residential properties grew an average 26 percent nationwide, and construction area rose by an annual 20.5 percent, whereas sales jumped by an average 18.8 percent during the same period, according to NDRC figures.
The report also predicted a more than 20 percent growth in terms of investment for this year.
Meanwhile, continuously rising housing prices will also curb market demand, the report said.
For instance, in major cities like Beijing, Shenzhen and Guangzhou in Guangdong Province, Fuzhou and Xiamen in Fujian Province, housing prices jumped 9.7 percent, 12.8 percent, 6.2 percent, 7.0 percent and 8.0 percent, respectively, during the first nine months of last year.
The report suggests the central government take further action to curb speculative investment in the sector and speed up legislation on property related taxes.
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