From Chinese Press

Gov't should stick to housing regulation

(People's Daily Online)
Updated: 2010-08-17 09:57

Commentary: Gov't should stick to housing regulation

Some local media recently reported that housing transactions in Shanghai and Beijing have boomed in July. They say the realty market is witnessing another upward surge and that the "most tough" housing regulation policies won't last over 100 days.

However, the fact is that the boom in July was based on the extremely low figure in June, and was much lower than the number of transactions before the new policies were released. Meanwhile, new homes located in remote suburb areas with low prices contributed most to the boom.

Take Beijing for example. In July, the average residential housing price was 21,140 yuan (around 3,100 U.S. dollars) per square meter, 5.2 percent lower than June.

It is obvious that the relatively higher housing transactions in July should not be exaggerated and it cannot serve as the basis for the predicting a "turning point."

The so-called boom in other cities is more or less similar to that of Beijing. Who really benefits from causing fear that housing prices will rise again by hiding key information in order to drive more people to buy new homes for fear for higher home prices?

When housing transactions boom, housing developers and speculators will be able to take the chance to promote new projects and sell houses they are holding. Disturbing housing regulation, influencing market expectations and reaping high profits are the only aims of the hyped-up "boom."

Data from the National Bureau of Statistics (NBS) showed that housing prices in China's 70 mid-sized and large cities dropped 0.1 percent compared with the previous month, witnessing the first decline in 15 months. In July, average housing prices in the 70 cities remained generally unchanged compared with June.

Housing prices in China are starting to fall, but are still unreasonably high. In several first-tier cities, housing prices remain high. Some second-tier and third-tier cities are still facing rising home prices. The target of the State Council's regulation policies is far from being achieved, and the bubbles will be more severe if housing prices start to rise again.

Local governments are effectively implementing the regulation policies released in mid-April, bringing about active effect in curbing rapidly rising housing prices. In the first quarter of 2010, land supply for property development nearly doubled year on year, and accounts for 37.4 percent of all 179,000 hectares of land supply.

The government should stick to the regulation and control policies for the housing market, strengthen housing welfare for the low-income group and solve the housing problem, which is the public's biggest concern, through multiple channels.