Shall we, shan't we now, that is the question

To buy or not to buy, that is the question haunting Yang Qi.

The 30-year-old white-collar worker has had plans to buy a house in Beijing for some years now. But just when she was about to decide on an apartment off East Fourth Ring Road recently, a TV program caught her attention.

The chairman of China's top property developer Vanke was asking potential buyers not to buy houses in the next three to four years because the market was reaching a turning point. The suggestion: Prices could fall.

"There has to be a problem with the property market if the middle class cannot afford to buy an apartment," Wang Shi told CCTV. And true to his suggestion, Vanke cut the prices of its housing units in Shenzhen, Guangzhou and Shanghai by 15 to 30 percent.

Does that mean property prices are falling? It's too early to say. As Cao Changqing, director of National Development and Reform Commission's (NDRC) pricing department said in an online interview in December, it's difficult to say whether a fall in property prices in some cities is a temporary phenomenon or a long-term trend.

"If the turning point is really coming, it would be worth the wait even though I need to buy a house before I get married," says Yang. "But I'm afraid property prices in Beijing will pick up again if I wait for several months."

Yang's fears are not unfounded because NDRC and National Bureau of Statistics (NBS) figures, released Thursday, show housing prices in 70 big and medium cities rose 10.5 percent year-on-year in December.

Reform of the property market is the second most important social issue for urban residents, says the Chinese Academy of Social Sciences' annual report on social development. Housing is more of a problem for families with a monthly income of 5,000 yuan ($688) or more, says the report, "Society of China: Analysis and Forecast", which is based on in-home surveys in Beijing, Shanghai, Guangzhou and other cities, and towns and villages.

High-income families are the biggest beneficiaries of soaring property prices. The reason: they are not so sensitive to price rise, down payments and mortgage rates because of their strong purchasing power. Hence, it's easier for them to make money by speculating in the property market.

Middle-income families, in contrast, are the biggest victims because they are desperate to buy a house but cannot afford one because of continuously rising prices.

Low-income families suffer, too, because they are not covered by an affordable or low-rent housing system, and most of them see their lifetime dream of buying a house vanishing each time prices rise.

Most homebuyers like Yang are facing a dilemma, for despite the rise in housing prices in December, there have been signs of cooling down in the property sector after double-digit growths in the past several months. Even NDRC and NBS said Thursday that the pace of price rise had fallen a little.

Some figures, however, leave potential homebuyers puzzled because they simply don't know what to and what not to believe, with confusing data of rising and falling prices at the same time.

Prices fell, but where? Shenzhen was the first to see a drop. Pre-owned house transactions in the southern city fell 36.8 percent in September, with the price dropping as much as 47.1 percent compared to August. The average sale price of new houses was 14,797 yuan ($2,040) per sq m in the city in October, a 10 percent drop from September.

Shanghai's property market, too, has cooled down since mid-November, dropping 50 percent from the first half of last year to below 600 apartments, according to the China Real Estate Index System.

Beijing municipal construction committee statistics show the average price for the 45 new residential buildings dropped 358 yuan ($49) to 14,966 ($2,064) per sq m in November, the first time the capital's property market fell in six months. According to China Real Estate Index, Beijing's average property price dropped from 15,162 yuan ($2,090) per sq m in November to 12,180 yuan ($1,680) per sq m in December.

But wait before drawing any conclusion. The drop in price we are talking about here is from November to December. But NDRC and NSB data show housing prices in Beijing actually rose 17.5 in December year-on-year. So where does that leave the buyer? In a sea of confusion. And that's precisely why so many homebuyers want to wait and see.

The fall in prices from November to December, however, has made doing business easier for Yang Shaofeng, managing director of Beijing-based property broker Conworld. Property developers have become more modest, with some new ones even seeking active cooperation with Conworld, something he could hardly imagine in the past. But isn't that natural, given that more and more people are deferring their decision to buy a house because property prices have actually risen.

"Property prices will see a more reasonable growth this year, but I don't think they will see a big fall in Beijing because the demand is still high," says Vincent Mo, chairman of SouFun, the country's largest real estate and home furnishing website. "But in cities, such as Shenzhen and Guangzhou, which have seen dramatic growth in the past few years, an adjustment is likely." Such fluctuations are not abnormal across a country as big and diverse as China.

Factors fueling the property market development such as a rising yuan and urbanization have remained unchanged, says Meng Qi, an analyst with real estate brokerage firm Century 21. "A short-term adjustment is welcome but that alone is not likely to change the upward trend of the property market."

Savills deputy managing director Erich Chan, however, says prices may flatten this year, with middle and low-end residential units probably experiencing a minor drop in prices and transactions both.

All this has prompted more and more people to wait before taking the big decision, says a SouFun survey. Almost 60 percent of the people covered by the study believe a turning point is not far away and nearly 70 percent think this is not the right time to buy a house.

A majority of the respondents to a Sina.com survey, too, have deferred their buying plans - 78.5 percent of 53,502 people surveyed said they would like to postpone their plans. "I won't buy an apartment now because the price is too high," says Beijing-based lawyer Lin Zhi. "Property prices can't to keep rising forever. They have to fall some time."

Shan Xiaohui, who teaches at China Women's University, too, has deferred her plans to buy a bigger apartment just like many of her friends. "Frankly speaking, I don't think Beijing's property prices will drop drastically, but it's not likely to grow too fast this year."

Beijing News business reporter Zhang Jiaqi thinks an adjustment in the property market is long overdue. "If I were a Beijing resident, I would wait for some time because I could get better opportunities to buy a house at a price fixed by the government."

Till such time comes, the choice is entirely with the buyer - if he or she can get over the complication of figures and be convinced of the decision. But that's easier said than done, especially if a person is in desperate need of a house.