Chinese Premier Wen Jiabao has promised to curb property speculation and increase the supply of affordable housing, after home prices surged in January, as many home buyers defied the government’s cooling measures.
According to SouFun Holdings Ltd, January’s home prices saw the biggest month-on-month increase in six months.
The central government last week raised down payments for second-home loans, introduced property taxes in Shanghai and Chongqing and urged the local government to set price targets on new properties. This set of measures followed a ban on third-home loans and a couple of interest rate increases in the past four months.
The Chinese Premier said in his Chinese New Year statement that China needs to “resolutely control the property market and maintain stable housing prices,” reiterating his comments made on 18 January, ahead of the latest property measures.
Property prices in all 100 cities tracked by SouFun rose one percent in January from December, with average values climbing to 8,645 yuan psm (S$1,680). This followed a 0.9 percent advance increase in December’s home prices, according to China’s biggest property website owner.
Mr. Wen said in December that the central government committed to add over 10 million low-cost homes this year, compared with nearly 5.8 million last year. The government stressed the construction of social housing at its central economic meeting in December that set plans for this year.
Mr. Wen also pledged last month that China will counter “abnormal credit growth and ensure overall price levels are basically stable” in the first quarter of this year.