China’s Real Estate Market Messy But Looking Up

For the last couple of months, China’s real estate market has been grappling with uncertainty. This has led to stiff competition in the realty market that staff from rival real estate agencies was caught in a street brawl in Beijing, the Daily Telegraph reported.

Close to 20 real estate agents came to blows outside the office of one real estate company and many even spotted bloodied noses. The fight was recorded by an onlooker who made the video go viral.

Home prices soar

China’s real estate industry has been growing at a rapid pace over the past decade. In 2010, real estate consultancy service provider Jones Lang LaSalle pitched China’s realty market as the world’s fifth most active real estate investment market in the world.

However, housing prices started soaring in June and July. According to a National Bureau of Statistics of China report, July recorded a month-on-month price increase of 0.7 percent in the largest number of cities. This increase was noted in the sales price of newly constructed residential buildings. Sale prices of second hand residential buildings showed a month-on-month price increase of 2.2 percent.

In a bid to control escalating prices, the government has brought in restrictions on home purchases in several cities, the Shanghai Daily reported. However, in some of these cities such as Shanghai, Beijing and Guangzhou prices soared between 0.1 percent and 0.3 percent from June, the report said.

Meanwhile, regulators will exercise more control on the property sector to prevent home prices from escalating further, Xinhua news agency quoted industry and government analysts as saying. Increase housing supply, expand property tax trials and raise home transaction costs to prevent the market from rebounding are some of the measure that will be implemented, Xinhua reported.

“Rising property prices are constraining aggressive policy action from the central bank,” Zhang Zhiwei, China economist at Nomura Holdings Inc, told Business Week. “The government will introduce more policies to contain a property bubble,” he said.