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BEIJING (MNI) - Property experts attending the Caijing Magazine Annual
Conference here this week said they believe housing prices nationwide --
especially in China's megacities -- will continue to grow, while they also
criticized the government's controls on the property sector.
Ren Zhiqiang, a former official of the Beijing branch of the Chinese
People's Political Consultative Conference and the retired head of Huayuan
Property Corporation, said Wednesday that "China's housing prices are still far
away from a reasonable level," indicating that more price growth could lie
Ren, an outspoken expert on the property sector who was placed on probation
earlier this year by the Communist Party for his "wrong comments" that
"disobeyed the party's principles and policies," said it was too early to say
that housing prices have peaked.
He added that the relatively higher prices seen in high-tiered cities such
as Beijing occurred because of "rich people" coming into the cities. China only
has 10 cities where housing prices average CNY20,000 per square meter, compared
with the average national housing price of around CNY7,000 per square meter.
"All the unreasonable factors of the property sector lie in [high] land
prices," Ren said.
He also said a major problem of China's property sector is that there is
"no market pricing signal," and added that the government's tight policies in
the sector had interrupted its normal development.
Another problem, he said, is that local governments "either do not let
property projects with high prices be sold, or forbid home purchasers from
finishing the signing of contracts online, or they limit the price," he said.
Ren said China's long-term property mechanism, which the central government
has been championing, needs to be built upon reform of its land system and Hukou
He said China's Hukou system, a household registration system that records
a person's information such as family and residence and determines if the person
can have access to public services, has partly caused the housing problem. He
said China's quick pace of urbanization had led to large populations working in
or migrating to cities, while their Hukou registrations and homes remained in
rural areas, causing an imbalance of housing supply and demand in cities.
Li Tie, chief economist and president of the City and Small Town Reform and
Development Committee under the National Development and Reform Commission,
China's main economic planner, said at the conference that the trend of housing
price rises in high-tiered cities such as Beijing will not change in the long
run unless the economy collapses or population inflows into big cities are
He noted that job opportunities, high-quality schools and hospitals are
overly concentrated in such cities, attracting a large number of migrants and
leading to higher property prices.
He said a big mistake the government made in its latest round of tightening
policies on the property sector was restricting sales and purchases in cities
that experienced price growth. He said this hurts the "reasonable demand" of
buyers in big cities who cannot afford houses in such cities but would normally
be able to buy in smaller nearby cities, except that the restrictions in the
bigger cities have had a spillover effect into the smaller cities, raising
prices in those cities, too.
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