To buy or sell? This is the question that is bewildering many Chinese in the real estate market.
Average housing prices nationwide have more than tripled over the last decade, with some areas seeing prices grow by 10 times the original price. Experts are debating whether there is a bubble in the market and whether prices will continue to skyrocket.
A bizarre bet made by Shenzhen Inland Real Estate chairman Guo Jianbo exemplifies the unpredictability of the market.
Chairman of Huayuan Real Estate Ren Zhiqiang predicted last year that housing prices would rise sharply in March 2013. Guo bet against him, promising to run 10 km along Chang'an Avenue, a major road in Beijing, without wearing a stitch of clothing if the prices rose.
It seems that he will almost certainly lose his bet. Figures from the China Index Academy, a commercial research institute, show that housing prices rose in 84 out of 100 sampled cities in March. Official figures will be issued soon.
The market has become even more complicated as a result of new regulatory measures issued by the central government in early March. The measures include a 20-percent tax on profits from homeowners' housing sales.
Most of China's provinces and municipalities have specified how they will implement the measures, although the details of the implementation differ from location to location. Some have specifically mentioned the 20-percent tax, while others have not mentioned it at all, stating that the rate of growth for housing prices will remain slower than per capita income growth.
In property transaction centers in Beijing, Shanghai, Zhengzhou and other large cities where the new measures went into effect on Monday, few people showed up to sign contracts. Many of the centers saw no deals made at all.
The lack of enthusiasm contrasts sharply with last month, when sellers and buyers rushed to the centers to get better deals. It was not rare to see people lining up at midnight outside the transaction centers.
The new measures have been described as heavy-handed by many, but others believe they will actually cause prices to go up further, as property sellers may include the new tax in their prices.
Pan Shiyi, a leading real estate developer, said the problem lies in the concentration of large amounts of property in the hands of few people. Some people have many properties, while others have none, he said, adding that the solution is to make property circulate.
Economist Lang Xianping said controlling inflation is the key to maintaining stable prices, adding that taxation is not correlated to housing prices.
Lang said the increasing housing prices should be seen as a symptom of a sick economy. The central government has tried to regulate the market since 2003, but prices have continued to rise.
The detailed measures being implemented in China's provinces and cities are still being compared and measured. However, it is not yet known precisely how they will impact the market, leaving many to continue wondering which move they should make.