Home buying limits to be extended: housing minister

The policy of limiting home purchases in major Chinese cities will be extended next year as part of the government's determination to cool the property sector, Minister of Housing and Urban-Rural Development Jiang Weixin said Tuesday.

"The central government's curbing policies will not be loosened next year, and speculation on property will be strictly suppressed," Jiang said at a national housing work conference in Beijing.

Several major cities including Qingdao, Shijiazhuang, and Guiyang, previously said that the purchase-limiting policies would expire on December 31 this year if the local government doesn't announce the policy will be extended.

"An extension of the policy is within our expectations," Liu Yuan, a senior research manager at Centaline China Real Estate, told the Global Times Tuesday.

Recent data has showed that home prices in some cities have begun to rebound, so "a limit on purchasing should not be loosened as it is the most important way to contain property speculation," Liu said.

"Otherwise it would be a waste of all the previous efforts," he added.

Among 70 major cities monitored by the National Bureau of Statistics, 53 saw a month-on-month rise in home prices in November, up from 35 in October.

The central government also clearly stated it would persist with current macro-control policies on the real estate market at the Central Economic Work Conference in the middle of December.

Although the policy of limiting home purchases has been in place for around two years, a decline in home prices, while long-hoped for by ordinary citizens, has been nowhere to be seen, especially in big cities.

"A sudden price decline is unlikely in China as the demand for apartments is huge, and urbanization will be an unavoidable trend in the coming decades," Liu said.

According to the latest local population census, Shanghai saw 600,000 new migrants annually from 2006 to 2010, a local official was quoted by Shanghai-based news portal eastday.com as saying in February 2011.

Their demand for apartments is almost equal to the supply of new apartments in Shanghai each year, according to Liu.

Even though the central government is determined to curb the property market, many cities, whose revenue depends heavily on land sales and housing development projects, have done a poor job of enforcing the limits, analysts said.

"Actually in some second and third tier cities like Changsha and Shijiazhuang, the policy of limiting home purchases was only implemented in downtown areas," Chen Baocun, a deputy director of the research institute with the National Real Estate Managers Association, told the Global Times Tuesday.

Chen said a limit on purchasing should not be a long-term policy, since this would be contrary to the basic principle of the market economy, and that comprehensive reform of the country's land and real estate market is urgently needed.

During the period when purchasing limits are implemented, the central government could take further strict measures to resolve the key issues in the property market, such as developers stockpiling land without developing it in order to wait for land and housing prices to rise, Liu of Centaline China said.

"Setting up a healthy stock market and offering more financial investment products could also ease people's enthusiasm for property speculation," Liu said.

Jiang also noted that the country will expand property tax trials to more cities beyond Shanghai and Chongqing, which have imposed a property tax since 2011.

China also plans to start construction on 6 million units of affordable housing and complete 4.6 million units next year, Jiang said.