Press briefing on H1 economic data

Phoenix TV:

Regarding the real estate sector, several indicators for the first half of the year have seen year-on-year slowdown in growth rate. Will the changes of the second half of the year bring more downward pressure on the economy? Thanks!

Sheng Laiyun:

Thank you for your question. Just as you have said, in the first half of this year, the real estate market has begun to witness differentiated adjustment. During the January –June period, the area of property sales went down by six percent and the sales volume went down 6.7 percent. The housing prices of different regions also vary. In the second and third tier cities, the housing prices went downward as they adjust themselves. I think there are two reasons for such situation: first, the year-on-year base for last year is relatively high. From January to June 2014, the area of property sales was 480 million square meters, but during the same period last year, the area was 510 million square meters. The growth rate for last year was nearly at 30 percent. So due to the high base, the current decline is normal. Second, it is the internal adjustment that the market needs, and the decline in the first half of the year was the normal reaction indicating that the market turned reasonable.

The real estate market's differentiated adjustment will indeed put pressure on the economy in the short term, but we believe in such regulation and control for the real estate market. From the long-term perspective, it is not only good for the real estate market's own healthy operation, but also good for the sound development of national economy. Thank you!