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Long-term mechanisms in real estate aim to stabilize prices

Reporter: Wang Xiaozhou 丨 CCTV.com

12-13-2016 16:17 BJT

China has decided to adopt longer term regulations in real estate development planning to maintain healthy development of the real estate sector. But what does that entail? 

Top Chinese leaders have set the tone for China's property market over the next few years by building an effective long-term mechanism that aims for healthy development of the sector.

Analysts believe a continuity in existing policies should come ahead as China adopts the new direction.
"We should ensure the continuity in our land policy, including cooling down the real estate market in first-tier cities and continuing the de-stocking effort in other cities. When mulling long-term measures, we should make sure that property development should not be for speculative profits but to make sure anyone who needs a shelter should be accessible to one."said Yao Jingyuan,researcher of Counsellors' office,State Council.

"On property development, I think we should make clear the principles in land supply. For example what kind of land can be used for real estate development and how much can we offer to developers. The second is taxation. We need a complete taxing system to regulate the real estate market."said Lian Ping,chief economist of Bank of Communications.

Real estate developers see more opportunities in lower-tier cities.

"First-tier cities will no longer be our focus for investment for the reason that land prices are already too high and land supplies are limited. Instead, we will give more attention to third- or fourth-tier cities."said Song Guangju,chairman of Poly Real Estate Group.
First tier cities may no longer be especially attractive to developers. But real estate agencies remain enthusiastic.

"New house sales in first tier cities will drop on the government's curb measures. But we expect a surge in transactions of pre-owned houses. I believe that will be a trend in first tier cities."said Lu Hang, CEO of Century 21 China.

Analysts say the government will also speed up the study of a long-awaited national roll-out of a property tax that has long been anticipated to curb people's zest to buy properties.

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