China to unveil long-term property market plan

SANYA -- China is expected to unveil a plan for a long-term mechanism to nurture the healthy development of the real estate market in the next three months, a senior industry official said Wednesday.

The plan outlining measures on urbanization development and a long-term development mechanism concerning the property sector is in the board room and can be expected soon, Zhu Zhongyi, vice president of the China Real Estate Industry Association, told the ongoing 2013 Bo'ao Real Estate Forum held in south China's resort city of Sanya.

"The mechanism will not only adopt economic means such as taxation and credit policies to regulate the market, but it will also create policies to improve the housing and land supply systems," Zhu said.

The Chinese economy's growth has been stuck in a protracted slowdown, easing to 7.6 percent in the first half of 2013, the weakest first-half performance in three years. However, the country's real estate market posted strong growth, which has renewed public concern of runaway home prices.

Official data show that prices of both new and existing homes continued to rise in most Chinese cities in June. Out of a statistical pool of 70 cities, 63 saw month-on-month home price rises. Last month, Beijing posted the biggest year-on-year gains, up 16.7 percent from last year.

Meanwhile, investment in the country's property sector increased 20.5 percent year on year in July, accelerating from 20.3 percent in the first half.

The Chinese government has been launching efforts to contain the red-hot real estate market since 2010, introducing a raft of control measures such as third-home purchase bans, property tax trials and widespread low-incoming housing construction.

But the measures, most of which were administrative means, have been widely criticized for only temporarily reining in home prices, as drastic rebounds could arise once they are lifted.

Zhu said that the forthcoming mechanism is expected to address issues regarding fund-raising, supervision, planning, quality and distribution for homes built for the country's low-income families.

However, the establishment of such a mechanism will take years, because the measures require a string of reforms, including fiscal reforms, to entrust local governments with more financial resources in order to wean them off their reliance on revenues from land sales, he said. ' To correct the strong market expectations of further hikes in home prices, Zhu warned that the central government will face greater difficulties in capping real estate prices if it does not move to strengthen the responsibilities of local governments in coordinating housing supplies and stabilizing land prices.

The annual meeting of the Bo'ao Real Estate Forum, the 13th of its kind, has been serving as a platform for officials, experts and industry leaders to discuss the development of the country's real estate sector.

The four-day meeting, which kicked off on Tuesday, has attracted nearly 1,000 participants this year.