New home prices in Beijing down 11% in 2011

New residential apartments’ prices in Beijing dropped by 11.3% last year (2011), thanks to the policies that the Chinese government had introduced to control an overheated property market.

According to the Beijing Real Estate Association, prices for new apartments inBeijingdropped to 13,173 yuan (2,091 U.S. dollars) for every square meter in 2011, with 78,000 units being sold.

According to the secretary general of the association Chen Zhi, the decline in sales is good news as it meant that the housing prices in Beijing were steady or falling.

The housing market in China took a nosedive after policies that the government had introduced started taking effect. Before the policies, speculators dominated the Beijing housing market and this led to an increase in deposit requirements and restrictions on second-home purchases.

A report released by the Association says that speculators were ran out of town and eventually, 90% of new home purchases went to families that previously had no property in their name.

As they sought to control the property market in the Chinese capital, authorities also embarked on low-income housing projects. In total, 32,000 low-income housing units were bought in 2011 this being a 38.5% increase from a year earlier.

According to Chen, low income housing sales in China will continue to rise as more apartments for sale are still being built.