(China Daily)
Updated: 2007-07-23 08:53

The government should firmly boost the supply of economical houses to curb the price of property, says a signed article in Modern Express. The following is an excerpt:

The central government announced it would bridge the gap between supply and demand for houses in the latest move to curb rocketing property prices.

The planned measures include giving more land for developing houses and building more low-rent houses.

Two conditions are needed for these measures to bear fruit: the land supply must be substantially boosted and the increased land designated to build lower-end houses.

Government determination is crucial to bringing these two conditions to reality.

The Beijing government has allocated 31 percent of lands it offered to the market in 2006 to build economical houses. But these lands were used to build low-priced houses for employees in government departments or institutes, rather than economical houses for the public.

Several ministries jointly issued a file in July 2006 asking local governments to earmark at least 5 percent of their income from land transference on building low-rent houses. But it seemed to fall on deaf ears.

Figures show that the Beijing municipal government did not give a penny to the fund in 2006. As a result, Beijing residents will have, at most, 1,000 low-rent apartments by 2009, while the city announced it would have 10,000 low-rent apartments available for qualified families by 2010.

The property market involves several fields including land supply, corporate finance and capital investment. It is unlikely to be manipulated with simple tactics. The authorities should take practical measures basing on a thorough understanding to the market if they really want to tame rocketing real estate prices.