China vows to curb real estate bubble in 2017

BEIJING -- China will promote the stable and healthy development of the real estate market in 2017, said a statement issued Friday after the Central Economic Work Conference.

"Houses are built to be inhabited, not for speculation," the statement said.

The country will establish a market-oriented and long-term mechanism that can curb a real estate bubble and prevent erratic fluctuations, the statement said.

The government will use land, investment, lawmaking, fiscal and taxation and financial instruments in order to achieve its aim.

Land supply should be increased reasonably in cities with strong pressure from rising prices, it said.

De-stocking efforts in third- and fourth-tier cities should be stressed.

In 2017, China will "take control of" money supply at the macro level, the statement said, while credit policy at the micro level should support the reasonable purchase of homes as residences and tightly restrict credit in speculation.

Policymakers have set the tone for the real estate market, while stressing expansion of people's access to homeownership, said Ni Pengfei, a senior researcher at the Chinese Academy of Social Sciences.

Liu Hongyu, head of the real estate research institute of Tsinghua University, stressed the importance of introducing a long-term mechanism in keeping real estate stable and healthy.

Low investment returns in the real economy and easy credit have triggered excessive growth in property prices in China and attracted too many financial resources to the real estate sector, causing bubbles and risks.

By the end of November, 690.95 million square meters of property remained unsold in China, down 4.27 million square meters from a month earlier.

China's property market has become increasingly diversified, with major cities reporting record prices and smaller cities struggling to shift the glut.

The split picture means the government still needs to strike a balance between curbing asset bubbles in big cities and boosting sales in smaller cities.

The three-day conference, which concluded Friday, saw Chinese leaders and senior officials sketch out the country's guiding economic policies and priorities for the next year.