Runaway property prices may not hurt economic growth at the moment, but that does not mean the country can afford a delayed response.

The longer policymakers avoid arresting the surge, the more frothy the property sector will become. Property bubbles have caused havoc in rich and poor countries alike.

The latest statistics show that China's housing prices are still far from reaching a plateau. This situation is a crucial precondition for the country to deflate a bubble without seriously damaging long-term growth potential.

Average new-home prices in 70 Chinese cities rose to a record high in September, led by Beijing, Shanghai and Guangzhou where average prices were up by more than 20 percent from a year earlier.

Such a red-hot real estate sector might look appealing to some local governments as they boost fixed-asset investment values and provide an income stream from land sales.

Yet the fact that property prices have kept rising year-on-year for nine consecutive months cannot be ignored. Nor can the fact that the pace of increase accelerated consecutively for the eighth month in the teeth of a slew of government guidelines in March to tighten control of the real estate sector. Recent signs of a buying rush, driven by fears that prices may rise further, also highlighted the increasingly heavy burden on homebuyers.

These are not abstract concerns, unrelated to society in general. Soaring property prices pose a possible threat to the banking system and elbow out investment in key industries. On top of this, an overheated property market makes it more difficult to persuade consumers to loosen their purse strings, considerably undermining efforts to shift the growth model toward more consumption-led growth.

It is widely expected that needed policy changes will be introduced in the Third Plenary Session of the 18th Communist Party of China Central Committee due in November.

To make consumption a key engine for the country's balanced and sustainable growth, Chinese leaders simply cannot allow increasingly unaffordable property prices to continue to act as a brake on expenditure.

(China Daily 10/24/2013 page9)