16/03 China's depositors say home prices "too high," inflation expectations ease: survey

English.news.cn 2011-03-16 15:21:12

BEIJING, March 16 (Xinhua) -- Three out of four Chinese urban depositors said China's housing prices now were "too high to afford," while their inflation expectations dropped in the first quarter this year, according to a central bank survey released Wednesday.

The People's Bank of China (PBOC), or the central bank, found in its latest quarterly survey of urban bank depositors that one third of respondents anticipated home prices to remain stable despite the government's tightening measures, 30 percent said prices would continue to rise, while one fifth expected prices to decline.

Also, the quarterly survey said two thirds of urban bank depositors thought inflation was "too high to accept" in the first quarter this year, down 7 percentage points from the fourth quarter last year, according to the survey result published on the central bank's website.

The first-quarter survey's "future price expectations index" dropped to 72.8 percent, down 8.9 percentage points from the previous quarter.

Further, the survey showed 47.1 percent of respondents thought prices would increase in the coming quarter, down 14.3 percentage points from the fourth quarter of last year.

Taking into account current prices, interest rates and income levels, 85.8 percent of urban residents preferred depositing more money in banks, with the willingness to "consume more" falling to 14.2 percent, the lowest since 1999 when the survey started.

As for investment options, according to the survey, "property" was top priority for one fourth of the respondents, followed by "funds and other wealth management products" for 21.9 percent and the "equity market" for 13.5 percent.

The PBOC carried out the quarterly survey among 20,000 urban bank depositors in major 50 cities.

Prices of newly-built homes in the nation's major 70 cities continued to rise in January, with the hike above 10 percent year on year in 10 cities. The National Bureau of Statistics (NBS) has yet to release the February data on Friday.

China's consumer price index (CPI), a main gauge of inflation, rose 4.9 percent year on year in February 2011 and the inflation rate was the same as January, compared with 4.6 percent in December last year, according to NBS.

Editor: Wang Guanqun

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