Longer-term solutions required
By You Nuo (China Daily)
Updated: 2006-06-05 09:13
For quite some time now, the problems in the real estate market, and the
complaints about them, have occupied much space in the Chinese
press.
They gave rise to the "eight points" guidelines for
regulating the market issued by the State Council, China's cabinet, in the
middle of last year, followed by the State Council's "six points" in mid-May
this year, then followed by the "15 points" last week, jointly signed by a
number of key central government agencies.
No doubt these guidelines will
do their bit to dampen the rapidly growing enthusiasm for property investment
and stabilize housing prices in major cities.
Restrictions will be heavy
for certain buyers of certain types of housing, particularly those who expect to
turn property ownership into a kind of investment by buying large units and
renting them to expatriate tenants working for multinational corporations.
Their purchasing plans are identified as the major factor driving up
housing prices.
At the same time, developers are required to build more
small units, which will have to be no less than 70 per cent of their total
offerings. The supply of small units is likely, as a result, to see an increase
over the next six months, and this enlarged supply will probably help stabilize
overall housing prices.
These are necessary moves to cool down a market
driven by unbridled growth and perhaps waste. A relatively quiet real estate
industry will help China rein in its overall GDP growth for the year by reducing
the demand for some key production materials.
(For more biz stories, please visit Industry Updates)
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