A report released by China’s central bank, the People’s Bank of China, says less people are planning to buy houses in the next three months, despite a backdrop of falling house prices.

A survey revealed that the number of people planning to buy houses in the next three months fell 1.8 percent compared with last quarter, and a record 2.8 percent year on year.

According to the bank’s third quarter report on monetary policy, the housing market was still undergoing adjustment in the third quarter of this year, with sales turnover plunging and house prices falling.

The report said that in the first three quarters of 2008, the total area of residential property sold was 400 million square meters, 14.9 percent lower than the same period of last year, while total sales turnover was 1.6 trillion yuan, 15 percent down from last year.

Two factors have contributed to the downturn in China’s housing market. The first was an inevitable correction to a market in which houses prices had grown so fast as to be unaffordable to most people. The second was the global financial crisis which has added a new element of uncertainty to the market, and led to potential buyers adopting a wait-and-see attitude.

The report added that the real estate industry is a pillar of the Chinese economy that sustains many dependent sectors such as construction materials and home furnishings. Ensuring a healthy and stable housing market remains a key aim of government policy.

(China.org.cn by Xiang Bin, November 18, 2008)