China to face pressure of property price increases in next 20 years: minister

BEIJING, March 8 (Xinhua) -- China will face considerable pressures caused by housing price rises in the next 20 years as hefty demands for housing will persist amid the nation's accelerated urbanization and industrialization, a senior official said on Monday.

Minister of Housing and Urban and Rural Construction, Jiang Weixin, says the main reason for soaring house prices is an imbalance between supply and demand.

"Demand is big, while land supply is limited. So pressures caused by rising prices are still mounting," said Jiang Weixin, minister of housing and urban-rural development (MOHURD) at a press conference held on the sidelines of the annual session of the National People's Congress, the country's top legislature.

However, the central government has a strong determination to curb runaway housing prices, he noted.

Questioned about comments on hefty land-transferring fees which have become a main source of revenue for local governments, Jiang said while this is true, soaring retail prices also add pressure and require more efforts by local governments to maintain social stability.

Driven by record bank lending and favorable tax breaks, China saw a sharp residential property price hike nationwide during the past year, triggering heated public complaints and fears of possible asset bubbles.

China's home prices in 70 large- and medium-sized cities, considered a housing price trend barometer, climbed 9.5 percent in January 2010 from one year earlier, the fastest growth in 19 months.

Chinese Premier Wen Jiabao on Friday reiterated his determination to curb the excessive growth of home prices in major cities while satisfying people's basic needs for housing as the annual session of China's top legislature opened.

A total of 63.2 billion yuan (9.25 billion U.S. dollars) will be spent by the central government on low-income housing in 2010, an increase of 8.1 billion yuan, or 14.7 percent over last year, Wen said.

The government will also build three million affordable houses and renovate 2.8 million shanty homes, he said.