China to keep controls on property market in 2014: minister

December 25, 2013 Leave a comment

China to keep controls on property market in 2014: minister

5:14am EST

BEIJING (Reuters) – China will maintain controls on its property market in 2014 while increasing the land and housing supply in cities facing big home-price prices, the housing minister said, in a sign authorities will not relax efforts to stabilize housing costs. Home prices in big Chinese cities have repeatedly set records despite a four-year long government campaign to cool the market, adding to the threat of a price bubble and social unrest as housing becomes unaffordable.At the same time, policymakers must balance the need to prevent a damaging bubble against the contribution to overall growth the property sector makes.

“We will keep the continuity and stability of the tightening policies in 2014 and implement properly existing policies,” Housing Minister Jiang Weixin was quoted by the official Xinhua news agency as saying on Tuesday.

The comments, released on Xinhua’s weibo microblog, came after home prices rose at the quickest annual pace on record in November, though signs have emerged that government efforts may be starting to bear fruit as monthly gains slowed.

Analysts expect policymakers to gradually switch to more market-based levers, including a property tax, to avoid a bubble.

Jiang said the central government would focus on giving differentiated policy guidance to cities to take into account different market conditions, but added that cities where rises are big must strictly implement tightening measures next year.

China’s property market is seeing a divergence between big cities, where prices are rising rapidly, and small ones, where the rises tend to be slower.

The central government initiated a tough campaign in late 2009 to curb property price rises, including strict rules for mortgages and restrictions on the number of homes that one family can own.

However, implementation of the directives has been patchy, with some local governments reluctant to hold back property development, a lucrative source of income.

China plans to finish construction of 4.8 million units of public housing next year and reiterated that it will start building at least another 6 million, Jiang added.

Filed under Macro Trends

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