China’s central government will continue to implement property cooling measures in order to bring down home prices to reasonable levels, according to Premier Wen Jiabao.
“We will strictly implement and gradually improve policies and measures for discouraging speculative or investment-driven housing demand, build on progress made in regulating the real estate market,” he said.
He added that the government will also develop more low-income homes and aims to starting construction on more than seven million housing units and complete five million units, while ensuring that they are built to high standards.
This policy reiteration comes as tension between China’s central and local governments grows due to property regulation, with local authorities relaxing curbs tentatively, something the central government has been unwilling to do.
China has imposed several cooling measures since 2010 to curb the real estate market, including higher downpayments and mortgage rates, property tax trials, restricting third-home purchases and the development of low-income housing.
As a result, prices of new homes in 70 major cities tracked by the National Bureau of Statistics in China stopped increasing in January. Previous data in January 2011 showed that 60 of the 70 cities surveyed witnessed home price increases, and the figure dropped to 39 cities in July last year.
In addition, local governments of several southern and eastern Chinese cities had announced plans to relax restrictions on home buyers, but they were called off within days.
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