Check housing prices and rentals

According to the National Bureau of Statistics, housing rentals increased 4.4 percent in July, which means rentals have continued to rise for the past 43 months. Although people's incomes have also increased during the period, the rate of increase of rentals in large cities has been much higher, says an article in Procuratorate Daily. Excerpts:

The government plans to double urban and rural residents' incomes by 2020. But given the rising housing prices and rentals in cities, the two-fold increase in incomes may not be of much help to the people. Perhaps the government should take some measures to keep housing prices and rentals in check to help urban as well as rural residents to enjoy the benefits of an increase in their incomes.

According to the National Bureau of Statistics, housing rentals increased 4.4 percent in July, which means rentals have continued to rise for the past 43 months. [Photo/Xinhua]

Rising housing prices and rentals have created an imbalance between supply and demand in the realty market. In first- and second-tier cities, demand exceeds supply because people are more inclined to work in large cities. In Beijing, for example, the supply-demand ratio was 1 to 7.6 in March. This makes it a real sellers' market. Besides, some real estate agencies manipulate the prices creating an artificial crisis in the market.

To change the sellers' market, the government should take steps to increase the supply of housing units both for purchase and rentals. Some housing units are reportedly lying vacant, especially because migrant workers and graduates cannot buy or rent them.

Since an estimated 32.6 million apartments are lying vacant in cities around the country, the government should introduce a "housing vacancy tax" to force builders and developers into lowering their prices to sell or rent them out.

(China Daily 09/17/2013 page9)