The prices of new homes near the Fourth Ring Road in Beijing are expected to exceed 80,000 yuan ($12,984) per square meter, analysts said on Tuesday, even amid a slowdown in the property market that has seen sales drops and lower profit growth for real estate companies.
Average home prices per square meter near the Fourth Ring Road now are very close to 80,000 yuan, "and the land for residential properties is becoming more rare, which will also boost the home prices," Zhang Dawei, chief analyst with real estate information provider Centaline, told the Global Times on Tuesday.
Zhang's view was echoed by Liu Yuan, another analyst from Centaline, who told the Global Times on Tuesday that because the Chinese government has lowered the down payment for people who plan to buy second homes, some housing markets, especially in Beijing and Shanghai, may get a boost.
While land prices are rising in Beijing, the profit margins of real estate companies nationwide are unlikely to grow.
Seventy-five housing developers listed on the A-share market saw their profit growth moderating in 2014, Chinese news portal ccstock.cn reported Tuesday.
China Vanke is among those companies that have seen squeezed corporate profit margins. The Shanghai-listed real estate developer reported on March 30 that its 2014 net profit margin also declined 0.6 percentage points to 11.41 percent.
Higher land costs and falling house prices have both affected the company's profitability, Tan Huajie, board secretary of China Vanke, said during the presentation of the company's 2014 annual results on March 31.