Experts: China's housing structure should be rationalized

Some experts say China's surging housing prices are due to structural problems in the market and next year's trend will depend on land and monetary policies.

Experts say the soaring property market is driven by a vicious cycle combining high property prices, the availability of mortgages, and high land prices. This structural problem is the root cause of the booming market.

Nie Meisheng, Chairwoman of Real Estate Chamver of ACFIC, said, "Personally I think China's property prices are now in the fast lane, and they're already over the limit. If the government wants to slow the speed, it surely can't step on the gas any further. But neither can it brake sharply, because that would cause new problems."

Low-income housing remains a problem. By the end of August, less than a quarter of the whole year's target of affordable homes had been completed. The insufficient supply has also added to the demand for commercial housing. Experts say the housing market structure should be adjusted.

Cheng Siwei, Fmr V. Chairman of Standing Committee, NPC, said, "The housing structure should be rationalized. Property prices should vary according to demand, type, location, and the environment including schools and hospitals."

Industry insiders say land policy and monetary policy will be the decisive factors for next year's market.

Pan Shiyi, Board Chairman of Soho China, said, "If monetary policy continues, I think property prices and transaction volumes will keep climbing steeply."

Some industry insiders expect policies to be tightened in the near future and the market may experience a correction next year.