Researcher: housing prices in Chinese cities to further drop in 2009

Special Report:Global Financial Crisis

BEIJING, Feb. 9 (Chinese media) -- Housing prices in China

are likely to drop by eight to 10 percent in 2009, with some of the big cities

like Beijing and Shanghai likely to see a 15 to 20 percent drop, said a

researcher of the Chinese Academy of Sciences (CAS).

Chen Xikang, a researcher at the Academy of

Mathematics and Systems Science, CAS, told Chinese media Monday that the estimates are

made based on both economic models and observations of the development of

China's housing market in the past years.

Chen, also a consultant with the World Bank,

originally made the remarks at a forum on China's economy held in Beijing on

Sunday.

"Housing prices have far surpassed the actual income

of the general public," Chen told Chinese media. "They have come down already since

last year."

High housing prices have long been a target of public

criticism in China, particularly in large cities.

The Beijing Municipal Statistics Bureau figures

showed the average yearly income of Beijing residents stood at around 40,000

yuan (about 6,000 U.S. dollars) in 2007.

The apartments in Beijing, however, were sold at

above 10,000 yuan per square meter within "the fifth ring", or the city's

downtown areas.

Zhang Qi, a professor at the Institute of Economic

and Resources Management in Beijing Normal University, said, "The year 2009 is

definitely a hard one for the real estate market."

Zhang said the real estate industry is unlikely to

quickly gain prosperity as it did in 1997 and 1998 when the Asian Financial

Crisis hit China and the Chinese government provided favorable policies to

attract more investment.

"This time, the aim of the government is to guarantee

employment and reasonable economic growth," Zhang said, "which leaves the fate

of the real estate market largely to the market."