Home buyers jump in for fear of missing bottom

Liu Xin, a 29-year-old company executive, finally decided to sign a contract with a real estate brokerage firm this past weekend. The price of the second-hand two-bedroom apartment Liu wanted to buy had fallen some 10 percent from three months earlier. The agent from brokerage Homelink told Liu last week that more people were showing interest in that apartment. "I read in the newspaper that many experts said prices would drop further this year, but who can really tell the bottom of the market accurately?" Liu asked. Liu missed the previous bottom in late 2008 and early 2009 as he waited for further declines. Most analysts and prospective buyers had a similar view at that time. Liu abandoned his home-buying plan in 2009 because of the strong price rebound in the second half of that year. This time, he didn't want to miss the chance again, considering his imminent wedding. The news that Shanghai would allow people who have held Shanghai resident cards for more than three years to buy a second home despite their non-permanent residence status helped Liu make up his mind. "It is almost impossible to get in exactly at the bottom," said Grant Ji, director of the investment department at real estate services company Savills. "For owner-occupiers, if the price has fallen to a reasonable range, they can buy now," said Ji. According to industry watchers, the property market has been warming up. Property sales in Beijing and Shanghai, for instance, both rebounded last week. In Beijing, 2,186 new and second-hand apartments were sold last week, up 30.2 percent week-on-week, according to the municipal government. Compared with the same period last year, however, sales were still down 62 percent. The scenario was similar in Shanghai. The floor space of apartment transactions rose 27 percent last week from the previous one, according to Shanghai Uwin Real Estate Consulting Co. With property prices gradually falling and the mortgage interest rate for first-home buyers back to the benchmark, consumers' willingness to make a home purchase is strengthening, said Hu Jinghui, a senior real estate expert and vice-president of the 5i5j Real Estate Service Co in Beijing.