Recent new lending policies from the Chinese government don't appear to be having much effect on propping up the battered housing market so far.

To breath life back into the housing market, the central bank last week cut taxes, mortgage rates and down payments to make purchasing easier for home buyers.

But dealers say they have not spotted any changes to the market, that has been in downturn for almost a year.

Hu Jinghui, Deputy General Manager of 5I5J Beijing said "From our observation, we can indeed see more customers visiting but the actual trading volume dropped 30 percent this week than the week before the policies."

The new policies don't kick in till November 1, prompting many investors to delay purchases until lending cost is actually cut. The other dilemma is that the central bank only issued guideline for the lending rates cut. It's up to each commercial bank and local tax department to set up their own rate cut frameworks, which will also take time. Dealers want action as soon as possible so that normal trading can be resumed.

Hu Jinghui said "Such policies are not enough to completely turn around the market. It seems that the government aims at increasing the trading volume, instead of the prices. It's an important move because when there is enough trading, the confidence will come back and the whole sector will resume its vitality."

According to an online survey, an overwhelming 72 percent people expect the housing prices to continue dropping, and another 80 percent say they will not buying anything in the near future.

(CCTV October 30, 2008)