By AFP | Mar 5, 2010
China to rein in soaring property prices: Wen
China on Friday pledged to rein in soaring real estate prices, curb speculative investment and expand low-cost housing amid fears of a damaging property bubble in the fast-growing economy.
In an address to the annual session of parliament, Premier Wen Jiabao said Beijing would crack down on illegal practices aimed at driving up prices to ensure the "steady and sound development of the real estate market".
"We will resolutely curb the precipitous rise of housing prices in some cities and satisfy people's basic need for housing," he said. Massive bank lending in 2009 has triggered fears that the cash flood has fed a spending spree by property speculators.|
Prices in 70 major cities rose 9.5 percent in January from the same month a year ago, the fastest pace since April 2008, the latest official data shows.
Beijing has been trying to cool the property sector by restricting lending, requiring buyers of second homes to put up a down payment of at least 40 percent, and hiking interest rates on mortgage loans.
The head of China's banking watchdog said Friday it would strengthen control of lending to developers, home buyers and local governments but did not provide details.
"The real estate sector is a highly speculative industry," Liu Mingkang, chairman of the China Banking Regulatory Commission, said on the sidelines of the National People's Congress (NPC).
"We have to scrutinise conditions prudently when giving out loans."Wen told the NPC the government "will make greater efforts to deal with violations of laws and regulations such as keeping land unused, property hoarding and price rigging."
The government will increase land supply for small and medium-sized condominiums to be sold at "low and medium price levels" and encourage people to rent, he said.
Beijing has allocated 63.2 billion yuan (9.3 billion dollars) for low-income housing this year, up 8.1 billion yuan from last year, Wen said. It plans to build three million houses and renovate 2.8 million units in run-down areas as well as expand a programme to revamp "dilapidated" rural houses.
Wen had previewed the major points of his speech last weekend in a rare online chat with web users."It is the government's responsibility to guide the property market," he said Saturday. "I am confident the government will ensure a healthy development of the property market."
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