China accelerates establishing long-term mechanism for property regulation

BEIJING -- China will maintain stability and consistency of property regulatory policies this year and accelerate establishing a long-term mechanism for real estate regulation.

"China will not waver in its efforts to implement property market regulation and will maintain continuity and stability of policies in 2018," said Wang Menghui, minister of housing and urban-rural development.

Wang said that the relatively rapid growth in home prices has been effectively curbed and there have been positive changes in property market expectations.

As the government maintained purchase restrictions aimed at containing speculative demand, new home prices softened in the country's biggest cities and recorded slower increases in other major cities monitored by the government.

On a monthly basis, new home prices declined in 12 of the 15 first-tier cities, while those in another 55 major cities surveyed posted slower or flat growth in February. Average prices for new homes in the cities of Beijing, Shanghai, Guangzhou, and Shenzhen all fell from the previous month, data from the National Bureau of Statistics (NBS) showed.

Liu Jianwei, a senior NBS statistician, said that the cooling measures yielded desired results thanks to the differentiated control policies implemented by local authorities.

During previous years, rocketing housing prices, especially in major cities, had fueled concerns about asset bubbles. To curb speculation, local governments passed or expanded their restrictions on house purchases and increased the minimum downpayment required for a mortgage.

In addition, China will move faster to implement a long-term mechanism for property regulation that ensures supply through multiple sources, provides housing support through multiple channels, and encourages both housing purchases and rentals, said the minister.

This year's government work report reiterated that "houses are for living in, not for speculation."

"We will support people in buying homes for personal use, and develop the housing rental market and shared ownership housing," said the work report.

So far, 51 state-owned home renting companies had been set up in 12 pilot cities, where government-led rental management and service platforms were established, according to the minister.

Analysts agreed that to build a long-term regulation mechanism for real estate market, efforts also should be made from aspects of land, financing, tax, multi-tier housing supply, as well as property laws and regulations.

The interest rates for home loans have picked up in major cities last month, with the national average interest rates for first and second home purchasing loans increasing to 5.46 percent and 5.79 percent, respectively, according to data from the Rong360.com, a mobile financing platform.

Relatively tightened liquidity will effectively contain leverage and curb speculative demand in the housing market, said Yang Xianling from real estate agency Homelink.

Meanwhile, China will act against the violations by developers and property agencies, said the minister.