House prices to fall back behind the logic
October 12, 2010/Dong Xiucheng
Regardless of the policies introduced, the possibility of sharp falls in house prices in China are very small, this is not to the wishes of the people as the objective reality, we must recognize this reality.
Since April the national emerging since the beginning of a series of regulatory policies, despite poor sales in the market, but the comparison of the real estate market in General is still in "strong" pattern, it seems early policies and people judge has great access to the market.
In fact, the price is firm is closely related to the development stages of China's economic and social realities, rely on policy of deliberately suppressing is powerless, because market supply and demand determines market prices is the basic economic laws, the Executive Force to a certain extent, affected the market, but in general it is difficult to change the market status quo.
The reality is the huge population of China, although most of the people in the low-income, but as long as there is a certain proportion of the rich can constitute a huge market purchasing power, unlike many Western countries there is a clear difference, so economists rely on the theory of Western economics to explain market realities becomes its sting, unable to explain the reality in theory.
Although on the surface of the lower income, seems to be disproportionate to the price, but in reality in our country did a certain proportion of the "rich" class, regardless of whether the wealth of these people to route the fair, whether this is the origin is unknown, but they've got a huge amount of money is a social reality.
Money on consumption or investment, not those who will make money in bed will need to make money from money, at least keep the money in the future or today and now equal, after all, people know this simple truth.
BR> the formation of large scale floating in the market, there is an urgent need to find investment solutions, and real estate market is one of the most effective investment of these funds, fund flows is difficult to avoid the real estate market trends.
China is currently in development stages of industrialization, urbanization is the inevitable result of industrialization is the inevitable way of industrialization, massive population shift to urban is the inevitable trend of population housing is needed, whether purchased or leased, is housing. Need for buying houses, also need for housing for those tenants, and sources need that investment in the rental purchase, otherwise there would be no market.
That an attempt to eliminate housing investment of so-called social equity is the absence of objective possibilities, sale and rental of housing are part of the real estate market, it is clear that neither the House nor the investment House, requires a large number of houses on the market.
China's objective is, land is extremely scarce resources, living land to reduce contradictions and rapid population increase in cities it is difficult to mitigation in the short term, so in the case of rigid demands continue to increase prices significantly decreased is absolutely unrealistic.
Traditional Chinese home buyers is making money, making money, and saving and investment, this opportunity is that each Chinese attitude, housing in addition to belonging to living things, there is also a spiritual role. Whether poor or rich, uncertainty on the future economic development trends of scepticism, especially worried about the form of inflation and makes its own wealth, so take advantage of housing for the hedge becomes a matter of mentality.
Once inflation occurred, what the price of goods, real estate cannot remain the exception, so by buying a House to a hedge to become an inevitable choice for all segments of society.
The short term, State regulation and policy may be able to let prices drop or remain relatively stable, but from a long-term trend, rising trend is inevitable, but may not appear under the strong control of the Government in the past boom, but expect a significant slump is absolutely fantastic a wish.