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BEIJING: Standing in the shouting tumult of a Chinese real estate fair, Chen Shiyong said, feels like watching a suicidal man on top of a building ignoring the pleas of bystanders to pull back from the edge.
Not that many of the some 142,000 potential buyers and curious visitors who crowded into Beijing's latest big housing property sales fair over the weekend were buying Chen's warning of the impending collapse of a price bubble.
Many said commercial housing prices in the Chinese capital and other cities were sure to keep rising, perhaps after a brief dip, shrugging off government efforts to cool the market. The disheartened said prices already well beyond their grasp were unlikely to come down.
"Nobody is listening to the government leaders. There's this mentality that has set in that this is a no-loss market," Chen said, nodding at the crowds around miniature building displays in Beijing's China World Trade Center.
"It's like watching a suicidal man who won't listen to anyone. Whatever you tell him, it simply strengthens his notion that he's right and the rest are wrong," said Chen, a 20-something investment analyst for Changjiang Securities, wearing thick glasses and a leather jacket.
The Chinese government shares some of his jitters.
Over the weekend, the top bank regulator, Liu Mingkang, said the country's banks must do more to rein in risky lending to land developers.
The average selling price of properties of seven major developers in mainland China increased from 8,069 yuan (RM3,805) per sq m in November last year to 10,810 yuan in March, Royal Bank of Scotland said in a report issued on Monday (April 12).
Some land plots in downtown Beijing recently fetched record prices, bought up by state-owned companies with core businesses nothing to do with real estate.
But for every naysayer at the fair, there seemed to be dozens of potential buyers who could give several reasons backing their belief that China's property market is unlikely to slow much, especially in the big cities.
What optimists, pessimists and rattled would-be home-buyers at the real estate fair generally shared was a belief that the central government lacked either the tools or the will to tame home price growth dramatically.
As Beijing tries to cool the market, that widespread assumption of government impotence could itself become a problem.
"I think prices will keep growing. The government can act if it really wants to. But does it have the guts?" said Wang Jun, an engineer attending the fair.
"Doing that will hurt a lot of interests, including local governments that need land revenue."
He said he earned about 70,000 yuan a year, about as much as it costs to buy two square meters of a new apartment somewhere close to central Beijing.
"If prices keep rising like they have, then ordinary residents won't be able afford anything, and even middle-class people will be squeezed out, and that could be dangerous," said Wang.
Liu, the bank chief, said the government had "enough bullets" to ward off risks from property fever, but small-time investors such as Zhang Xixiong have so far proven to be wily prey.
Zhang was working his way around the display booths at the Beijing fair, searching for another apartment to buy, on top of the three he said he already owned.
The government's efforts to tighten credit and mortgage requirements for non-owner-occupiers have not bitten deeply so far, said Zhang. He brushed aside the latest warnings about an over-heated market.
"In the end, the demand is still there. I don't think government controls can play that much of a role," said Zhang, a middle-aged man.
Urbanisation, the home-buying aspirations of the nation's young middle class, and the sheer amount of untethered wealth sloshing around the country would keep pushing up housing demand and prices in Beijing and other big cities, he said.
"I'm looking to sell one of my places, and I get serious calls about it at all hours, even after midnight," said Zhang.
This year's spring real estate affair at the Beijing World Trade Center sold property worth 2.9 billion yuan, the Beijing Youth Daily reported on Monday (April 12).
That was a dip on last year, when the organisers reported sales worth 3.2 billion yuan. Crowds were also down this year, the paper said.
Chen, the investment analyst and a self-described regular at the fair, said numbers were partly down because more properties were being advertised and traded online.
There were still plenty of prospective buyers: impending retirees looking to move to quiet suburban homes; young couples looking to buy their first home; small investors hunting for bargains, sometimes in small Chinese cities or foreign markets exhibiting at the fair.
There were also plenty of ordinary residents who wandered around and wondered if they could ever afford a new home.
"At these prices, I'd spend my whole life paying off the home even if I found a well-paid job," said Zhang Menqian, a recent university graduate who, struggling to find work in Beijing, had taken a job handing out promotional leaflets at the fair.
Chen, the investment analyst, said he had come to the fair hoping to persuade investors to buy instead into the stock market, which he said was a surer way to profits.
"I warn them to switch, but they're not listening to me," he said. "They'll be unhappy people soon." -- Reuters
