China's residential land prices drop 13 pct in H1

By Kim Young-gyo HONG KONG, July 6 (Yonhap) -- Residential land prices in China declined 13 percent on-year in the first half of 2011 as the Chinese government tightened measures on the property market, an industry report said Wednesday. Earlier this year, Beijing announced a set of measures to cool property markets, including stricter down payment ratios and mortgage rates, as the country's property prices skyrocketed on robust economic growth. The average price of residential land in 130 cities across China dropped to 1,451 yuan (US$225) per square meter in the January-June period this year from 1,283 yuan in the same period last year, the private data provider China Real Estate Index System (CREIS) said. Transactions of residential land fell 6 percent to 162 million square meters in the first six months from a year earlier, it said. The Institute of Economic Research at Renmin University of China said in a recent report that China's soaring housing prices will meet a downward inflection point in the third quarter of 2011. "Some cities experienced a downward trend in property prices in the January-June period, though without a significant drop," the report said. The National Institute of Property Finance and Beijing Beta Consulting Center predicted that China's first-tier cities, such as Beijing and Shanghai, could see this year a 30 percent fall in property prices, while smaller second-tier cities could see a drop of 10 to 20 percent. Meanwhile, China is set to introduce in the second quarter of next year a large amount of government-subsidized homes, in an aim to provide affordable housing to the country's lower income class. According to the Chinese government's plan, construction of 10 million government-subsidized homes will start before the end of October.