Expert: Hainan might become the next Dubai

China is not Dubai, but while the whole country is regulating the real estate market, Hainan has become the exception with more money flocking there, China International Capital Corporation (CICC) chief economist Ha Jiming said January 30, 2010.

As for China's future house prices, Ha Jiming said, "Some people believe that China's house prices have another 20 or 30 years to grow, but I do not agree with this. I think in five years prices won't fall, but in 10 years or 15 years they are likely to fall. Between that it is hard to tell."

Ha said, "take housing prices in Shanghai for example, the ratio between monthly mortgage payments and income has reached as high as 106 percent, which is the Government's problem, not the problem of the market. The Government's policy has indeed made house price growth in some big cities faster than second and third-tier cities, therefore, the Government should increase investment in low-rent housing. Now the policy is changing, I think the future of house price growth in the first-tier cities will be slower than the second and third-tier cities. "

Ha Jiming said in the future, as more and more people may be able to inherit houses from their parents, and people no longer need to buy a house, house prices in China will surely decline.

Source: People's Daily.
Link: http://english.people.com.cn/90001/90778/90862/6884058.html.