Rein in housing prices

The recent rise in domestic housing prices in defiance of real estate regulations highlights the need for the authorities to take more forcible and targeted measures to tame the speculation-prone housing market.

Figures released on Tuesday by the National Bureau of Statistics show that 53 of China's 70 monitored large and medium-sized cities witnessed a month-on-month price rise in November, compared with 35 in October.

As a barometer of national housing prices, Beijing witnessed a 0.6 percent rise in the price of newly built commercial housing in November from the previous month, according to the bureau's statistics.

Earlier data from the city's real estate association even shows that the average price of new homes in the capital was 21,800 yuan per square meter ($3,497), a 5.2 percent rise month-on-month.

Despite the claim from Beijing's statistical authorities that different price rises are a result of different statistical methods, one thing is clear: Housing prices in an increasing number of cities are now on a rising trajectory. And these price rises are being accompanied by a sharp increase in house sales across the country.

The recent rise in house prices and sales volumes is indeed disheartening to potential homebuyers who had been anticipating a reasonable decline in prices, which, if not forcibly curbed, will raise questions about the effectiveness of the authorities' regulatory measures, in place for several years.

To make matters worse, it will raise people's expectations of further price rises and possibly coerce more potential buyers into the market ahead of schedule. Such kind of concern is not groundless. According to a recent survey of urban residents by the central bank, 18.9 percent said they had plans for housing investment in the fourth quarter, nearly four percentage points higher than in the second quarter.

Continued rises in house prices will continue to hijack China's economy and sabotage its ongoing efforts for economic transformation and structural adjustment.

They also mean there should be no delay in the adoption of more effective regulatory policies and measures, such as a higher property tax on investment-related and speculative real estate transactions.

(China Daily 12/20/2012 page8)