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State Council tightens controls on housing
By Cao Qian |
July 15, 2011, Friday
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Print Edition
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CHINA is to intensify tightening measures in cities where home prices remain extremely high to help fend off a speculative bubble, the State Council said yesterday.
Premier Wen Jiabao urged local governments to abide by efforts to cool the overheated property market and to meet targets for building more affordable public housing for ordinary families unable to afford property due to surging prices.
"Pressure on housing prices in some cities is still strong, and in some places controls have been relaxed," a government statement cited Wen as telling a State Council meeting yesterday. "The current real estate market is at a critical period. We must unswervingly stick to controlling the trends," it said.
Home-purchase restrictions, at present mainly in larger metropolitan areas and regarded as some of the government's toughest policies to rein in housing speculation, should be extended to less affluent, or second and third-tier cities which have seen home prices gain too rapidly, the State Council said.
Existing measures to cool down the country's housing market should remain in place and be rigorously enforced. At the same time, the government would strive to curb steep rises in rents, it said.
The latest efforts to combat soaring home prices and fight asset price bubbles had seen partial success although some cities continued to feel the pressure for further price growth, the Cabinet meeting said.
It said that local governments should step up efforts to make sure that 10 million units of affordable houses will commence construction across the country by the end of November.
"The fact that some investors have over the past few months turned to second and third-tier cities where people are still free to buy properties did help push up home prices quickly in those areas," said Zhang Hongwei, an analyst at Tospur, a property research organization. "By extending limits on home purchases in more cities, the government will be able to have a better control of the country's overall property market."
China launched a series of tightening measures in January which included raising down payments and interest rates, restricting home purchases, and property tax trials in Shanghai and Chongqing.
However, while transaction volumes have been reduced in major cities, there have been no significant price cuts and real estate developers continued to register good sales.
China Vanke Co and Evergrande Real Estate Group, for instance, both retained their status as the country's top home sellers - by value and by volume respectively - for the first half of this year with each reporting more than 80 percent growth from a year ago, according to a half-year report released earlier this month by China Real Estate Information Corp and China Real Estate Appraisal.
And among the top 10 companies by value, seven managed to sell homes worth 20 billion yuan (US$3.1 billion) or more in the first six months, compared with five companies a year earlier. By volume, six out of the 10 developers sold more than 3 million square meters of new housing, compared with only one in the first half of 2010.
The majority of Chinese cities continued to register home price gains in May, several months after the implementation of the latest batch of rein-in measures.
New home prices, excluding affordable housing, were found growing month-on-month in 50 out of the 70 cities monitored across the country, the National Bureau of Statistics said last month.
Premier Wen Jiabao urged local governments to abide by efforts to cool the overheated property market and to meet targets for building more affordable public housing for ordinary families unable to afford property due to surging prices.
"Pressure on housing prices in some cities is still strong, and in some places controls have been relaxed," a government statement cited Wen as telling a State Council meeting yesterday. "The current real estate market is at a critical period. We must unswervingly stick to controlling the trends," it said.
Home-purchase restrictions, at present mainly in larger metropolitan areas and regarded as some of the government's toughest policies to rein in housing speculation, should be extended to less affluent, or second and third-tier cities which have seen home prices gain too rapidly, the State Council said.
Existing measures to cool down the country's housing market should remain in place and be rigorously enforced. At the same time, the government would strive to curb steep rises in rents, it said.
The latest efforts to combat soaring home prices and fight asset price bubbles had seen partial success although some cities continued to feel the pressure for further price growth, the Cabinet meeting said.
It said that local governments should step up efforts to make sure that 10 million units of affordable houses will commence construction across the country by the end of November.
"The fact that some investors have over the past few months turned to second and third-tier cities where people are still free to buy properties did help push up home prices quickly in those areas," said Zhang Hongwei, an analyst at Tospur, a property research organization. "By extending limits on home purchases in more cities, the government will be able to have a better control of the country's overall property market."
China launched a series of tightening measures in January which included raising down payments and interest rates, restricting home purchases, and property tax trials in Shanghai and Chongqing.
However, while transaction volumes have been reduced in major cities, there have been no significant price cuts and real estate developers continued to register good sales.
China Vanke Co and Evergrande Real Estate Group, for instance, both retained their status as the country's top home sellers - by value and by volume respectively - for the first half of this year with each reporting more than 80 percent growth from a year ago, according to a half-year report released earlier this month by China Real Estate Information Corp and China Real Estate Appraisal.
And among the top 10 companies by value, seven managed to sell homes worth 20 billion yuan (US$3.1 billion) or more in the first six months, compared with five companies a year earlier. By volume, six out of the 10 developers sold more than 3 million square meters of new housing, compared with only one in the first half of 2010.
The majority of Chinese cities continued to register home price gains in May, several months after the implementation of the latest batch of rein-in measures.
New home prices, excluding affordable housing, were found growing month-on-month in 50 out of the 70 cities monitored across the country, the National Bureau of Statistics said last month.
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