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Real estate under the spotlight

05-18-2010 13:35 BJT

BEIJING, May 18 -- Following a big stock slump Monday, sources said the country's industry watchdog, together with other ministries, is drafting a "stricter" housing rules to promote a healthier market.

However, experts said researchers and institutions misinterpreted the policy, contributing to the panic.

"In fact, the figures in April for industrial value-added output and exports have shown a better performance, and it should be good news to the stock market," Lu Zhengwei, a senior economist with the Industrial Bank, told the Global Times Monday.

The growth of industrial value-added output was 17.8 percent in April year-on-year, the National Bureau of Statistics announced last Tuesday, and Customs figures show that exports in April reached $91.94 billion, up 6.9 percent month-on-month.

"The figures show the structure of the economy has gotten better and with less risk. As for the new housing control rules, it is not a blow to the market, but a benefit to middle and long-term development," said Lu.

Officials from the National Development and Reform Commission (NDRC) said the government is drafting new housing policies on long-term development covering the land use system, commercial housing supply and low-income housing, as recently reported by Economic Information Daily under the Xinhua News Agency. "The policy will explain the government's role and the percentage of government investment," said the anonymous official.

The new rules are coming just one month after the government delivered a "hard punch" to the over heated property market.

On April 15, the government said purchasers looking to buy second houses will have to make down payments of no less than 50 percent of the total value of the properties, with an interest rate 1.1 times China's benchmark interest rate.

"Reining in housing prices is a must-solve problem for the government," said Premier Wen Jiabao in Tianjin Saturday, but he also said the government should prevent the negative effects of policies superimposed on the housing market.

A CICC report said there would be fewer possibilities to tighten macro-control policies because the government faces hard choices.

Chen Guoqiang, director of the housing research center at Peking University, Monday said this is not the "proper" time to impose additional control policies, adding that it will take more time to analyze the effectiveness of the rules issued last month.

"Currently, the housing control policies have shown a positive effect, but the question is how long the policies should be kept in place," said Liu Shangxi, vice director of the Research In-stitute for Fiscal Science under the Ministry of Finance.

In the latest research by China Business News, 80 percent of top businesspeople from the housing sector said the biggest risk for the housing market is the uncertainty over future housing polices.

Most of those interviewed said this year's housing controls are different from those in 2007, because this year they have cash at hand and were given time to be mentally prepared for the coming policies.

Editor:Zhang Jingya |Source: Global Times

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