The Ministry of Construction is to set up a nationwide information and warning network to prevent overheating in the housing industry.

Ministry official Wu Xuyan said: "The building of the warning network is one of the planned measures to oversee the real estate industry, which has gradually become market-oriented.''

Using information technology, the network will process data related to local and national economic indicators and produce a report for local housing decision-makers.

The national system will be based on data from the various city-level systems, Wu told China Daily.

The network will cover 35 major cities across the nation and is expected to begin operating by the end of this year, the ministry said.

A pilot operation of the alarm system will be conducted in 13 major cities, including Shanghai in East China and Tianjin in North China, by the end of this month.

Wu said some experts and officials have expressed fears of excessive investment in China's real estate since the beginning of last year.

However, the ministry said the "overall condition of China's real estate is healthy'' even though several cities risk facing too much investment and excessively high housing prices.

In April, the ministry sought suggestions from six renowned economists, who insisted that real estate development should continue with its role in accelerating China's economic growth.

In recent years, the real estate sector has become one of China's core industries, contributing 1.5 to 2 percentage points to the overall growth rate of gross domestic product.

But a report from the National Bureau of Statistics said a glut of empty housing has emerged in China. Between January and April, the number of unlet and unsold properties grew by 9.6 per cent compared to the same period last year, it said. The increase was much higher than the 6.4 per cent growth rate witnessed during the same period last year.

A bureau official said the growing number of empty properties is attributable mainly to the large number of new homes coming onto the market.

During the first four months of this year, construction was completed on 42.8 million square metres of new homes, a year-on-year increase of 37.4 per cent.

Construction also began on 146 million square metres during the same period, an increase of 31.7 per cent.

China's real estate investment grew by 33.5 per cent year on year to 198 billion yuan (US$24.9 billion) during the first four months of this year.

Premier Wen Jiabao has called for continued effort to promote house-buying among urban residents. The issue was included in the government's package of economic measures aimed at reducing SARS-induced losses.

China's major commercial banks have also promised to supply sufficient capital to real estate developers and mortgages to potential home buyers to support the housing sector.

But restrictions have been put in place to curb further investment in villas, large apartments, office buildings, hotels and other luxury developments.

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