Chinese Real Estate Market not Overheating: Minister

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Last updated at: (Beijing Time) Friday, July 05, 2002

Chinese Real Estate Market not Overheating: Minister

China's current real estate market is not overheating, said Minister of Construction Wang Guangtao ata press conference Friday in Beijing.

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China's current real estate market is not overheating, said Minister of Construction Wang Guangtao ata press conference Friday in Beijing.

Wang said the scale of construction in housing development was well-balanced, with stable growth in the real estate market.

However, he also mentioned a trend to overheating in real estate development in some areas. The Ministry of Construction hassent warning signals to relevant departments in these areas, demanding local governments closely watch and take timely precautions against housing industry bubbles.

Statistics show in the first five months of 2002, investment inhousing development in China grew 36.7 percent from the same period in 2001, 10.9 percentage points higher than the growth rateof capital assets investment during the corresponding period.

From a national perspective, the real estate market was not overheating, said Xie Jiajin, chief economist with the Ministry ofConstruction. During the first half of 2002, the floor space of commodity housing sold was over 5 million square meters more than that built.

Together with some commodity buildings left over from 2001, allhousing built this year had been sold, showing the enormous marketcapacity, especially in coastal areas.

Only when supply appeared to exceed demand could the housing market be regarded as overheating, said Wang. He attributed the overheating trend in some areas to organizational system adjustment or a fledgling housing market.

Local governments needed to analyze the supply-demand ratio in the housing market, and take precautions against overheating tendencies, he said.

The Chinese government has decided to strictly control the supply of land. Meanwhile, the Ministry of Construction will severely penalize illegal activities in housing development, according to sources.

Figures show during the January-March period of 2002, investment in commodity building development was over two-thirds of the total investment in housing development, with more than 93 percent of individual purchases in commodity housing.

During a period of overheating in the early 1990s, most housingin China was bought for business purposes and by group purchasers.

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