China’s Housing Prices Still Irrational: Ren Zhiqiang
One of China’s leading real estate figures says that the country’s housing prices are still “far from rational,” and that the ongoing urbanisation process is set to maintain strong demand for years to come.
Ren Zhiqiang (任志强), director of Shanghai-listed Huayuan Property, said that housing prices are still “very far from rational levels,” given that the national price-income ratio is less than 6% when land prices are deducted.
Ren points out that the urbanisation process is not yet complete, and that housing demand in the cities remains huge.
According to Ren the current round of property control policies that the Chinese government is using to contain real estate markets suffers from a number of problems, including lack of a legal foundation or a “contractual spirit,” and lack of market pricing singles.
“All of the price signals are false, leading to erroneous market decisions….so when we say that a turning point has arrived in the real estate market, it’s because we never know what the price signals we receive mean.”