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March 16, 2016

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Property market ‘in good health’

Source: Xinhua | March 16, 2016, Wednesday | Print Edition

CHINA’S property market will continue to see steady and healthy development thanks to sound economic fundamentals and enormous demand, the housing minister said yesterday.

“I am confident in the development of the sector,” Chen Zhenggao told a press conference on the sidelines of the annual parliamentary session.

He cited several favorable factors. including stable economic growth, the rapid pace of urbanization and huge demand from the urban population.

China’s property market has shown signs of warming since the middle of last year, reversing a 2014 downturn, but new problems are emerging, including soaring prices in major cities and a backlog of inventory in others. There were 739 million square meters of unsold homes by the end of February this year, up 15.7 percent year on year.

To address the issue, policy-makers have identified reduction of housing inventory as one of the top priorities for this year and announced a number of measures, such as reduced levies and lower deposits.

Responding to a question on home purchases by migrant workers, Chen said favorable measures would be rolled out to help them buy homes, find jobs and settle down in cities.

He said the Agricultural Bank of China issued loans worth 17 billion yuan (US$2.5 billion) in January to home-buying migrant workers.

The residential property market is unlike the housing bubble experienced by Japan in the 1980s, Chen said. Recently, comparisons had been made but the situation in Japan was set against a completely different political and economic backdrop, he said.

China today and Japan in the 1980s have distinct conditions, with different levels of urbanization, economic development and government measures.

Also yesterday, a senior housing official said he was confident China would achieve this year’s renovation target for substandard housing.

The reconstruction target for 2016 has been set at 6 million housing units, Ni Hong, vice minister of housing and urban-rural development, said, as stated in the government work report delivered to the national legislature.

A subsidy from the central government, and financial support from institutions such as China Development Bank and the Agricultural Development Bank of China had boosted the project, he said.

The State Council initiated the three-year substandard housing renovation plan last year. It aims to rebuild 18 million housing units by 2017. Last year, work on 6.01 million units began, exceeding the target of 5.8 million units.

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