Making housing healthy for common prosperity

Post-divorce, the two persons ended up legally owning up to three properties. And, after a while, when they remarried, well, as married couple they got to keep them all－one more than what the regulation permitted.

That clever approach to realty investing is now history. But the authorities concerned are not done with tightening existing regulations and introducing new, stringent ones, all indicating that the country will resolutely safeguard its property market's healthy and steady development, industry insiders said.

The measures range from the Ministry of Housing and Urban-Rural Development's supervisory interviews with real estate developers, regulations for property agencies, restrictions on existing home prices, caps on bank loans for the real estate sector, to land supply and supportive measures to encourage rental housing and eliminate speculative demand for school district homes. They are all inclusive and well-focused, said Zhang Dawei, chief analyst at Centaline Property Agency.

"From the local level, the new measures are seeking to fine-tune their respective flaws, and ministries play the role of supervisors," Zhang said.

Chen Jie, a professor specializing in property research at Shanghai Jiao Tong University, said the effectiveness of existing measures would be the standard to decide the necessity for more regulation in the second half of this year.

"In cases when the existing policies prove effective, there would be no need for additional measures, but if the market shows signs of disorder, then there would ensue a 'fix-it' approach on the part of regulators," said Chen. He said the measures could vary in terms of land, supply and tax among others.

One distinctive character of this year's regulations is more guidance from the ministry-level authorities, combined with coordinated efforts by multiple ministries. An example is a guideline issued by eight government departments, including the Ministry of Housing and Urban-Rural Development, vowing to significantly improve the real estate market order in about three years to come.

The authorities would work together to crack down on irregularities of property market activities ranging from real estate development and home sales to housing rental and property services.

"The guideline is a response to long-standing problems existing in China's residential property market, including the least developed government-subsidized housing system," said Yan Rong, president of the Shanghai Real Estate Science Research Institute.

Yan said the guideline also raised policies that cover areas without clear regulations before.

Hui Jianqiang, head of research at Beijing Zhongfang-Yanxie Technology Service Ltd, said the guideline is a joint action and a turning point for future supervision of the property market.

"Under such a problem-solving coordinated working system, we could expect the home prices to stabilize in at least the coming three years," said Hui.