Ministry of Housing Pushes for Continued Market Controls
Over the past weekend, China’s Ministry of Housing and Urban-Rural Development released a statement regarding local governments and their real estate management goals. The ministry is pushing for cities to maintain their tighter regulatory measures and stick to their original goals.
This is the second time in the past 10 days that the ministry has voiced concerns about the current state of the real estate market. On May 9, the ministry arranged talks with senior government officials in Chengdu and Taiyuan about property market regulation. This is because both cities were reporting seeing rising prices year-on-year in both the new and second-hand housing sectors.
The ministry urged officials to take specific measures in order to ensure stability and healthy development within local property markets, stressing that “houses are for living in, not for speculation”.
The ministry is pushing for the compilation of five-year housing development plans in first and second-tier cities by the end of the year. Accountability will also be held for the local governments of cities that do not reign in the spike in housing prices. There will also be crackdowns on social media accounts that spread speculative information that is misleading,
Along with meeting with senior officials in Chengdu and Taiyuan, the ministry met with 10 other first and second-tier city government officials regarding real estate management.
Chief analyst with Centaline Property Zhang Dawei stated “The new measures mean housing market regulation is upgrading from tailored policy-making to the evaluation of the effects of regulation”.
Last week, official data showed that new residential housing prices are declining on a yearly basis in first-tier cities, along with price growth slowing in second and third-tier cities. However, in contrast, prices of the same residential housing prices are increasing on a month-to-month basis in 58 of the 70 surveyed cities, with the largest increases being in the second and third-tier cities.
One of the main causes of rising prices is due to the efforts to attract more professionals to work in cities by lowering household access qualifications. Over 50 cities also introduced preferential policies such as housing subsidies, again as a way to attract professionals and thus stimulate local economies.
There is no current end to when the government will loosen its control on the real estate market, it may be even 6 to 12 months until the government begins to relax the control it currently has. All of this is being done to not cause another rapid increase in property prices.
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