Property market cools on China's sunshine resort island: official

19:28, August 06, 2010      

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The runaway trend of soaring housing prices in China's southern island province of Hainan has been reined in thanks to a series of local government policies, a provincial housing official said Friday.

Hainan's housing prices had fallen from an average 14,000 yuan (2,059 U.S. dollars) per square meter last year to about 8,000 yuan, Cai Renjie, deputy director of Hainan's housing department, said at a press conference on the sidelines of the Shanghai World Expo.

Prices soared alarmingly after China's central government in January announced that Hainan was to be developed into a global tourist resort by 2020.

Prices averaged around 6,200 yuan a meter last summer, said Cai at an event to promote Hainan as an international tourist destination and to launch Hainan "culture week" at the Expo.

The fast expansion of the real estate market on the island earlier this year sparked fears that the island might repeat its boom-bust property trajectory of the 1990s.

Fearing speculation, the central government introduced a series of policies to curb housing prices, including steeper sales taxes and more affordable housing.

"The current price is relatively low compared with other large Chinese cities," Cai said.

However the real estate sector was a "foundation" for economic development and it was still gathering momentum, he said.

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