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  • Jul 29, 2014
  • Updated: 10:48am
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Beijing property prices rising sharply beyond reach of some buyers

Despite talk about government intervention to cool the mainland's housing market, buyers are finding that they can't afford to wait

PUBLISHED : Wednesday, 06 February, 2013, 12:00am
UPDATED : Wednesday, 06 February, 2013, 4:59am

"Frustration" is the word used by Amy Zhou to summarise her home-buying search in Beijing.

The 33-year-old bank employee and her husband began looking for their first flat in 2008, and five years later they have finally found something close to what they have been looking for at a price they could afford.

After their first child was born last year the young couple redoubled their efforts to find a home of their own (they are now living with her parents in an old residential block in Beijing's Chaoyang district ). But until recently, after viewing more than a dozen flats they had still not found a place to buy, even though they now had more money to spend.

"We did not expect to find that the property market was so hot," said Zhou.

"We found two flats that we were both happy with and asked the property agency to contact the owner for a talk. But the same afternoon the agency told us somebody else had already paid a deposit."

So when they saw a third flat that suited their needs, though not ideal, the couple moved fast and paid the deposit immediately. Now, after five years of searching, they have finally found a home of their own - a 100 square metre twin-bedroomed home outside the North Fifth Ring Road, for which they paid 2.83 million yuan (HK$3.5 million).

After such a long wait their timing could be in their favour, since latest indications are that the housing market is turning positive, with volume staying strong and price growth accelerating, buoyed by pent-up real demand and a stable political environment now that a new leadership has taken office.

Data from the China Index Academy, a unit of SouFun holdings, China's biggest real estate website operator, shows that the average price of a new home in 100 major cities recorded an eight successive month-on-month rise in January, to 9,812 yuan per square metre. That represented an increase of 0.03 per cent from December and on a year-on-year basis prices were up 1.2 per cent - the first annualised rise in prices in nine months.

In Beijing the average price of an apartment stood at 25,075 yuan per square metre in January, up 2.27 per cent on the previous month, and 5.93 per cent on the same month last year, according to China Index Academy. In Shanghai the average price was 27,655 yuan per square metre, up 2.3 per cent from December and 1.72 per cent higher than a year ago.

In Guangzhou, the average price rose 2.14 per cent month-on-month and Shenzhen rose 2.18 per cent when compared with that of December.

A survey by E-House (China) Holdings showed the total housing areas sold in the nation's four major cities - Beijing, Shanghai, Guangzhou and Shenzhen - amounted to 4.25 million square metres in January, up 343.8 per cent year-on-year. The pick-up in sentiment was also reflected in the strong sales results reported by developers.

For the top 30 developers, the aggregate average selling price grew 13 per cent during the last two months of 2012, according to Macquarie Securities.

The growth continued in January with Evergrande Real Estate Group, which has properties in more than 120 cities, announcing on Monday that it achieved contracted sales of 7.25 billion in January, representing a year-on-year growth of 226.1 per cent.

David Ng Ka-chun, the head of China and Hong Kong property research at Macquarie Capital Securities, said the central government would need to pick the optimum time to cool the market - after increases in land sales and new starts to ensure supply, but before the market gets overheated and price growth becomes out of control. .

Meanwhile the concerns of many individual home seekers like Mary Ma, are not looming measures to curb the market, but whether they can buy a flat.

Ma and her fiancé believed that housing prices in Beijing would fall since the central government launched a series of austere tightening measures.

But when they started to look for a flat a few months ago, they found they were wrong.

"Apparently, the price has been rising a lot compared to that before the government tightening and it seems unlikely to go down. We don't want to wait anymore," said Ma. So the couple finally bought a 76 square metre loft in the east of Beijing for 3.8 million yuan in December.

"I don't care what the property price may be like tomorrow. I think the best time to buy a house is when you truly need it," said the 29-year-old.

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