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Wen vows to tame housing

By Wang Ying and Hu Yuanyuan (China Daily)
Updated: 2010-12-27 07:56
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BEIJING - Policies launched this year to tighten the rise in housing prices have not been well implemented, Premier Wen Jiabao said on Sunday, though the central government will continue its efforts to maintain prices at a reasonable level.

He made the remarks while taking questions from netizens while visiting China National Radio, according to a report on the station's website.

"I made a promise to the Chinese people last year that I would try to keep housing prices at a reasonable level during my tenure, and I won't shrink from the goal," Wen said.

The government will work to increase the supply of affordable housing and will strictly control speculation in the property market next year, he said.

Wen said the country will start to build 10 million units of government-subsidized property in 2011, nearly double this year's 5.8 million units.

Furthermore, the central government will increase the supply of land for government-subsidized housing construction and use credit leverage to control housing speculation.

"I'm confident we can make housing prices return to a reasonable level through these measures," he said.

But the premier also made it clear that it is hard to have every citizen own property due to the country's limited land supply and huge population.

He said the housing ownership rate in China's cities and towns has reached a very high rate of 80 percent.

He said some people who cannot afford property, such as new graduates and migrant workers, can rent apartments. "(But we should make sure) the living conditions are good and the rent is reasonable."

The central government introduced a slew of policies to cool the hot real estate market this year, including the suspension of mortgages for third-home purchases in Beijing and Shanghai. But Wen acknowledged that these policies have not achieved satisfactory results.

The latest data from the National Bureau of Statistics showed property prices in 70 major Chinese cities rose 7.7 percent on average year-on-year in November. That's slower than the 8.6 percent increase in October and the 9.1 percent figure for September. But the month-on-month figure increased 0.3 percent.

And property developers have staged a comeback in recent weeks by pouring billions of yuan into land auctions across the nation.

Figures from Centaline China, a nation-wide property agent, show that 10 leading property developers have invested 14.8 billion yuan ($2.23 billion) to grab parcels of land in the first 16 days of this month, compared with 21 billion yuan in November.

The Beijing municipal government's income from land this year is expected to rise more than 50 percent over the previous year to more than 150 billion yuan.

Zhang Dawei, an analyst with Centaline China in Beijing, said the premier's remarks on Sunday have given a strong signal that the government will not sit on its hands as the housing price keeps ballooning.

"It's predictable that more tightening measures will be rolled out to tame the overheated property market, and he has implied in the speech that current housing prices are unreasonable," Zhang said.

Wang Yulin, deputy director of the policy research office of the Ministry of Housing and Urban-Rural Development, said he hasn't seen a distinct rise in the supply of housing, though the government has stepped up efforts to put more land onto the market.

"How to make an efficient use of the existing stock of housing is also important to ease the imbalance of supply and demand," Wang said at the Beijing Urban Development Forum on Saturday.

But Han Wei, vice-general manager of Singapore-headquartered Capitaland (North China), said the company is still optimistic about next year's property market despite the continuous tightening measures.

"We're actively seeking opportunities to purchase land, betting on the long-term development potential of China's housing market," said Han.