Official calls for careful review of property curbs

As the domestic-property market enters a critical phase, it's important to make sure all tightening measures are in place, an official from the Ministry of Housing and Urban-Rural Development said.

"It's time to review the effect of the property-tightening policies and find out what to do next," said Wang Juelin, deputy director of the policy research center under the ministry.

"As long as existing housing policies are carried out well, there should be no worries about stabilizing the real estate market," said Wang, quoted by the China Securities Journal.

"Although some local governments make this or that adjustment on the home-purchase limits (to enlarge housing sales), they won't affect other cities. But it may weaken the market expectations on the policies' implementation," he warned, stressing the importance of sending the right signal to the market.

On January 26, 2011, the State Council announced new policies, dubbed collectively as a "new eight-item measure", to cool down property-market fever. The measures include raising the down payment for second-home purchases from 50 percent to 60 percent, and ending third-home purchases.

Wang said that even if new policies are announced, they won't go further than the new eight-item measure, which is by far the strongest action taken to curb the housing market.

An official from Shandong province said last week that the province will take the initiative to pick eligible newly built residential properties for spot sale, sparking heated debate over the existing presale system.

But Wang said it may be too early to talk about ending the 18-year-old presale system, as property developers still don't have enough financing channels.

"Surely the presale system has its shortcomings, such as homebuyers' having to pay money in advance long before they can own the house. So we should adjust the system in a way that both protects homebuyers' rights and solve developers' cash problems," Wang said.