THE NATIONWIDE FALL IN THE PRICE OF NEW houses that began recently does not mark the end of China's efforts to stave off a real estate bubble. Rather, it is only the beginning of the end.

To effectively prevent a property bubble from crippling the growth of the world's second largest economy, Chinese policymakers must brace for the loud complaints and pressures that falling house prices will inevitably invite.

It is reassuring to know that Premier Wen Jiabao on Sunday pledged the government will not be swayed from the tightening measures introduced to cool the property market.

Still, no one should underestimate the potential backlash that may follow the decline in property prices.

Average home prices in the country's 100 major cities fell for the second consecutive month in October to 8,856 yuan ($1,400) per square meter, down 0.23 percent from September, according to the latest report from the China Index Academy.

And price cuts in first-tier cities like Beijing and Shanghai are so much sharper that some property developers were even reported to be facing strong protests from existing homeowners.

After months of drastically shrinking house sales, the ongoing competition among real estate developers to cut prices is a clear sign that the government's measures to deflate the property bubble are bearing considerable fruit.

It is widely expected that if the government continues to maintain firm curbs on the real estate market, house prices will reach a turning point early next year.

Should that be the case, Chinese policymakers should be given credit for their resolute efforts to defuse a property bubble that could do a great deal of damage to one of the world's key growth engines.

The danger of such a property bubble is real in this country given that the unrelenting real estate boom has driven housing prices up by 140 percent nationwide since 2007, and by an eightfold increase in Beijing over the past eight years.

A turning point in the property market will not only give a huge boost to China's current fight against inflation but also facilitate an adjustment of house prices in line with people's income growth.

Granted, the downward adjustment of housing prices will not be painless. Price cuts of certain real estate projects may be too drastic for some homeowners who bought their homes at higher prices to swallow. But do not mistake it as a barometer of the national property market, which, statistically, has witnessed little price adjustment.

Chinese policymakers should resist premature calls for a loosening of policies for the long-term health of both the property market and the Chinese economy.

(China Daily 11/08/2011 page8)