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People's Daily Online>>China Business

Housing price regulation won't slacken

By Hu Yuanyuan (China Daily)

09:17, March 15, 2012

China will not slacken its efforts in regulating housing prices, since they are still far from falling back to a reasonable level, Premier Wen Jiabao said on Wednesday.

At a news conference after the conclusion of China's annual National People's Congress session, Wen called for long-term steady and sound development of the country's property market, saying gains will be lost and chaos will occur in the housing sector if the current regulations are loosened.

"If we develop the housing market blindly, a bubble will emerge in the housing sector. When the bubble bursts, it will not only adversely affect the housing market, but also weigh on the entire Chinese economy," he told reporters.

"The price should be considered according to people's incomes, and what I want to say is that the current price is far beyond that level."

The people's demand for housing is strong because China is a big country, with 1.3 billion people, at a stage of rapid industrialization and urbanization, according to Wen.

He said that, instead of each one having his own home, "We will continue to encourage people to rent houses."

While the fundamental role of the market in allocating resources should be fully exerted, the hand of government is indispensable as it can promote stability and social equality, he said.

Home prices in China fell for the sixth consecutive month in February, according to SouFun Holdings Ltd, the country's largest real estate website. Property prices nationwide fell 0.3 percent, the biggest drop since September 2011.

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