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Analysis and Policy Options on the Performance of Real Estate Market in the Second Half of the Year (No 106, 2015)


By Shao Ting, Institute of Market Economy, Development Research Center of the State Council (DRC)

Research Report No 106, 2015 (Total 4791)


In the first half of 2015, due to the impact of preferential policies in areas of finance and taxation, house sales in China were notably on the rise. There was a gradual return of confidence among real estate developers and a sign of improvement in such leading indicators as investment and area of purchased land. However, owing to a supply glut, the present round of recovery in the housing market was characterized by an effort at reducing the number of unsold houses. As developers in general adopted a measure to ensure sales volume and stabilize prices, real estate prices were kept relatively stable. With regard to different regions, a deepening divergence relating to housing market performance still remained, with a much better situation in first- and second-tier cities than in third- and fourth-tier ones. In the second half of 2015, growth in housing sales will continue. Yet, as a result of the overall supply-demand situation, no great fluctuation will be observed in house prices. In cities beset with an over-supply of housing, prices will further trend lower. Growth of full-year sales and investment in real estate is expected to be 5% and 6% respectively year on year. In terms of regulatory policies in the second half of 2015, attention should be paid to utilizing housing finance policies in a proper manner and stimulating the regulation initiatives in local governments.