Property curbs to stay in place for next year

Controls on the property sector will continue, to prevent over-investment from buyers next year, the Ministry of Housing and Urban-Rural Development said on Tuesday. China has tightened its curbs on the property sector since 2010, when home prices rose beyond the reach of average wage earners. The government introduced a series of restrictions to control house purchases in several cities, requiring higher down payments and bringing in property taxes. Some 28 percent of wealthy investors faced huge losses in the real estate market last year, according to the latest annual Chinese wealth report from the Boston Consulting Group and China Construction Bank Corp, and 3 percent of them saw losses of more than 30 percent. China\'s high-net-worth population is defined as those with financial assets of more than 6 million yuan (960,000 U.S. dollars). Most property investors have encountered severe difficulties after failing to sell luxury houses to compensate for huge losses experienced by the tightened policies. Ding Yi, a developer specializing in luxury mansions in Wenzhou, Zhejiang province, said: \"Those property investors who purchased houses after 2009 have to suffer losses of more than 30 percent if they want to sell their properties now.\" Ding said most experienced property investors have not been hit with large losses but those with less experience have \"learned a lesson\". After the central government tightened policies for home purchases, investors\' enthusiasm cooled dramatically. Ding said: \"I know that investors have mostly stayed out of the property market and are waiting for better prices to sell.\" A small number of investors who took out high-interest loans to buy properties were forced to sell at a loss of 30 percent on the market price to repay their debts, Ding said. Zhuang Chen, a Wenzhou property investor with 30 houses nationwide, said he bought most of the properties before 2010 when the restrictions were imposed. \"I am still waiting for housing prices to recover, which will happen sooner or later.\" Zhuang said many of his friends have had trouble selling their properties. However, Dai Fang, an analyst with Zheshang Securities, said the property market is now relatively stable, and housing prices are growing gradually and will continue to rise in 2013.