Wen vows to curb excessive growth of home prices
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Chinese Premier Wen Jiabao on Friday reiterated determination to curb the excessive growth of home prices in major cities and satisfy people's basic need for housing.
He made the pledge while delivering a government work report to the Third Session of the 11th National People's Congress(NPC), China's top legislature, which is the latest demonstration of the government's determination to tame the runaway home prices.
Driven by record bank lending and favorable tax breaks, China saw a sharp residential property price hike nationwide in the past year, triggering heated public complaints and fears of possible assets bubble.
China's home prices in 70 large- and medium-sized cities, a housing price trend barometer, climbed 9.5 percent in January 2010 from a year earlier, the fastest growth in 19 months.
Wen promised an increased supply of low-cost housing and common residential houses, restraining of speculative purchase, tighter land use management and stricter control of bank credit.
A total of 63.2 billion yuan (9.25 billion U.S.dollars) will be spent by the central government in low-income housing in 2010, an increase of 8.1 billion yuan, or 14.7 percent over last year, Wen said.
The government will also build 3 million housing units for low-income families and renovate 2.8 million shanty units, he said.
Wen's remarks indicate the government's regulation target in the real estate sector this year, which will emphasize on satisfying demand of mid- and low-income families while ensuring a healthy development of the market, said Gu Yunchang, vice president of China Real Estate Research Association.
"To curb the excessive growth of home prices is a must for the healthy development, or else the foaming market would bring destructive consequences to the industry," said Gu.
China's central and local governments has begun to take moves to deflate the housing bubble since late last year, including reimposing a sales tax on homes sold within five years of their purchase and raising down payment requirement for families buying a second or more houses with bank loans.
In another move to cool the property market, the People's Bank of China, the central bank, announced twice within a month to raise the deposit reserve requirement ratio earlier this year.
During an online chat with the Chinese Internet users last week, Wen expressed his confidence in the government measures in response to complaints over soaring home prices.
"It is the government's responsibility to guide the property market. I am confident that the government will ensure the healthy development of the property market," he said.
