Cities take their time

Local authorities were slow to respond to the national policy, too. Shanghai, China's finance hub, was the first -- and one of the few -- to announce its regional housing policy to encourage home-buying, especially for low-income households.

Beijing authorities, and those in other cities, said they needed more time to figure out who could get tax breaks and wouldn't have a plan ready to announce until the end of this year.

"The real estate market accounts for more than a half of Beijing's domestic fixed-asset investment. We have to be cautious to keep the sector stable," a Beijing municipal construction commission official said, asking to remain anonymous.

Property accounts for 10 percent of all economic activity in China and has a broad impact on the steel and appliance industries and the service sector.

After several years of soaring home prices, investors saw things slow last year. Home-buying plans are at a 10-year low.

An exhibition from October 29 to November 3 attracted more than 60,000 people, but few deals were made despite many discounts, organizers said. People were waiting to see how the new policies would affect housing prices.

Holly Liu was looking for a flat that would make it more convenient for her 2-year-old son to attend a better school. "The agency is calling us more frequently. But to me, it seems the market is stagnant," she said.

Buyers become frustrated

Eyewitnesses said a protest occurred last month near a new apartment building in eastern Beijing.

"I saw about 100 people occupy the agent's office, destroy the house models lying on a huge table and block the door," said Ren, an analyst at the Beijing office of an American financial services company.

"The protesters were furious because they signed purchase contracts just a few months ago at a price of 14,000 yuan per square meter, but now the price has dropped sharply to about 8,000 yuan," Ren said.

Although prices in outlying areas have fallen in recent months, real estate developers and agents contended that prices would not plunge too much downtown.

"I don't think the new policies will lead to a large price drop," said Zhang Hao, a Ximeng Real Estate agent. "Demand for housing is still huge in Beijing, especially among newlyweds, recent graduates and white-collar workers in their 20s.

"Last month, we offered four buildings in southern Beijing at a price of 10,500 yuan per square meter. Many young people rushed to buy, and all 400 apartments were sold out within a month," said Zhang.

But for Xi, who agreed to pay 1.1 million yuan for the apartment and made the initial payment, all he wanted was a loan and the details of the tax cuts.

"I think the price is fair, and the former owner can make a reasonable profit," he said. "Life is full of uncertainty. I hope we can truly enjoy the benefits [of the new policies] soon."

(Xinhua News Agency November 7, 2008)