Share
BEIJING: The Chinese government has succeeded in curbing property speculation in some cities where real estate prices were rising too fast, the Housing Ministry said on March 8, acknowledging that strong demand will continue to drive prices.
Beijing has in recent months tightened rules governing mortgage down payments and hoarding by developers of land and finished apartments in order to put a brake on property price inflation -- a major complaint among ordinary Chinese.
In a statement released during the annual session of China's parliament and its political advisory body, the ministry said property prices had now stabilised.
"Because of a number of initiatives taken by the central and local governments, I believe that housing prices will develop in a relatively stable way," Minister Jiang Weixin told reporters, adding that controls on the second-hand housing market and a lower lending target this year would help moderate prices.
Sharp rises in housing prices have become a pre-occupation of Chinese society and the topic of a popular and controversial television series.
Many middle-class Chinese benefitted from early housing reforms that allowed them to own, and then sell for a high profit, former state-owned housing. Others have vaulted into the ranks of the wealthy by flipping high-end housing.
But many young couples despair of being able to buy a home.
"Prices are too high for recent graduates," Chen Xiaodan, a 23-year-old student in Beijing, told Reuters. "There is no way I could manage to buy a house, no chance at all."
Local governments that must meet higher authorities' targets for GDP growth and preventing social unrest also need rising real estate prices to keep revenue flowing, Jiang said.
"The problem is that local mayors and party secretaries rely on real estate for revenue. They're happy to see high land prices, high real estate prices," he said.
"In the face of this preference for prices to rise, the central government has set a target for local governments to ensure housing supply and make sure prices don't rise too high," Jiang said, adding that the central government was promoting the construction of low-cost housing.
Nonetheless, Jiang said strong demand would bolster Chinese property prices for the next 20 years as China's huge rural population migrates to cities, and as families seek more spacious apartments. -- Reuters
