Housing prices unlikely to dive, say economists

A visitor learns about a property project at a housing expo in Suzhou, Jiangsu province. [Photo/China Daily]

Despite slowing economic growth, China's housing prices are unlikely to fall much because the sector remains a pillar of economic growth, economists said.

Prices had soared earlier this year prior to the announcement of market-cooling measures.

"Based on data of the first three quarters, I suppose the economy has bottomed out," Zhang Liqun, a researcher with the State Council's Development Research Center, told a monthly seminar of the China Center for International Economic Exchanges on Wednesday.

A remarkable sign is the stable GDP growth. China's GDP expanded 6.7 percent in the third quarter of 2016, in line with the first two quarters.

"China's current macroeconomic situation is better than expected and the positive factors outweigh the negative ones," said Xu Hongcai, deputy chief economist of the CCIEE.

The declines in both exports and investment have been two key downward pressures since 2010.

"Investment is key to stabilizing economic growth," said Zhang."And investment, especially in the fields of infrastructure and property, has initially formed a basis for a safe economic landing."

From January to September, infrastructure investment increased 19.4 percent year-on-year.

Property investment only increased 1 percent in 2015, and rose 5.8 percent in the first three quarters of this year, supporting the stabilization of investment growth as well.

But the property markets of some first-and second-tier cities overheated since early this year, drawing much attention everywhere, which eventually resulted in the policy adjustment, Zhang said."

Housing prices soared in some cities due to policies aimed at property de-stocking, which has resulted in some social problems," said Zhang Xiaoqiang, vice-chairman of the CCIEE.