China’s housing market is likely to go through a prolonged consolidation process and Beijing is likely to adopt a more “targeted” approach in regulating the market, the China Securities Journal reported on Monday.
Regulators would shift to a market-oriented mindset, which relies more on taxation and other market forces, compared with forceful home purchase limits in the past, according to a commentary published by the state-owned Xinhua News Agency on Sunday.
The comments came amid mounting expectations of a turnaround in the struggling housing market. A number of lower-tier cities like Hohhot, Nanning and Jinan have eased housing purchase limits one after another in recent weeks.
In addition, property developers are urged to learn the lessons from ambitious property developments that have turned into “ghost towns”, and decisively shift to projects that cater to residents’ needs and livelihood, the commentary said.
The article also noted the “divergence” of property market performance in different regions, with some cities struggling amid a shift from “golden time” to “silver time”. And some regions are warned to get ready for a “black steel” era.
Moreover, it also criticized the “speculative” and “gambling” attitude prevailing in the market. “Today, speculators in many cities still believe they can double their money in purchasing property,” it said.
Buyers and those who rely on the model of land finance should gear up for an “inflection point”, the article said.
It’s not the first time for the party mouthpiece to give hints about a shift in government policy on the housing market. Since March 2010, Xinhua had published five articles decrying the skyrocketing property prices. Two weeks later, the government unveiled a set of home purchase restrictions, which plunged the market into a downturn.
Guangming Daily, another state-owned newspaper, published a story on July 7 saying the property market is merely going through a “temporary downside correction” instead of heading to a great crash.
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