Hundreds of real estate outlets close in Beijing: agency

AFP, Tuesday 8 Nov 2011

Demand for homes is falling across China after authorities, fearing a bubble, banned second home purchases and trialled property taxes

Real estate agents in Beijing have been forced to close hundreds of branches this year as government restrictions on property purchases squeeze demand for apartments and houses, state media said Tuesday.

Nearly 1,000 outlets have been shuttered since the start of the year, including 177 in October alone, as property sales in the Chinese capital slump, Xinhua news agency said, citing a survey by real estate firm Home Link China.
Despite growing signs that government measures to cool the red-hot property market are working, Chinese Premier Wen Jiabao last week vowed to keep the restrictions in place.
"I want to emphasise that property tightening measures will definitely not change, and our aim is to bring home prices to a reasonable level," he said in remarks published by state media, during a visit to Russia.
"We have implemented real estate controls for two years, and some important measures have been put into use... This will surely ease house price pressures," the Beijing Evening News reported.
Demand for apartments has been falling across the country after authorities, fearing a property bubble, banned the purchase of second homes, increased minimum down payments and trialled property taxes in some cities.
At the same time, property developers have been hit by a lack of funds, as the government hiked interest rates and restricted bank lending to rein in surging inflation and bring real estate prices into line.
In Beijing, sales of second-hand homes in the first 10 months of the year fell 35.8 percent year on year to 101,188 units, Xinhua said, citing official figures.
Ratings agency Standard & Poor's said last month it expected China's property prices to fall by 10 percent nationwide over the next year as the restrictions took effect.
Around the country, prices of new homes in Chinese cities actually remained resilient in September from August, with prices in 24 out of 70 Chinese cities rising.
Another 29 cities recorded stable prices in September, while only 17 cities recorded price falls, the government said.
But independently compiled data released by Soufun Holdings, a real estate website operator, showed average prices for new homes nationwide dropped for the first time in a year.
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